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Dedication

To my dearest parents, my family, friends and respected teachers who motivated, supported and encouraged me in every aspect of my life.

Abstract

Internship tr aining for the students of Business Administration is a complimentary portion of the education, where students are put at various organizations of their respective specialization; to see and apply their theoretical knowledge what they have studied dur ing their academic program at the institute. BankIslami is one of those organizations where student can achieve his/her academic and professional knowledge productively. I was put in the BankIslami Jhelum Br anch to complete financial system was studied i.e. cash balances, advances, loans ,turnover, chronological development and growth ,its relative study and financial ratios were thoroughly studied. As BankIslami is newly opened I slamic bank in the market where it is facing a tough competition from other public sector and private banks therefore financial SWOT analysis was also made however focus of the study has been on the analysis of financial ratios.

Table of Content
Acknowledgement s Abbreviations Executive summary CHAPTER 1 Introduction to the Report 1.1 Back ground of studies 1.2 Purpose of the studies 1.3 Research Metholodagy 1.3.1 Primar y data 1.3.2 Secondary data 1.4 Scope of studies 1.5 Merits of the study 1.6 Limitation of the study 1.7 Scheme of study Chapter # 2 Introduction to Banking & BankIslami: 2.1 Back Ground I ntroduction 16 2.1.1 Banking Industry in Pakistan 16 2.1.2 Growth of Pakistans Banking I ndustry17 2.1.3 Banking Law in Pakistan 17 2.1.4 State Bank of Pakistan (Central Bank) 18 2.2 Banks in Pakistan 18 2.2.1 Government banks 18 2.2.2 Private Banks 18 2.2.3 Foreign Banks 19 2.3 Introduction to the BankIslami 20 2.3.1 What is BankIslami? 20 2.3.2 Competition Situation 20 2.3.3 BankIslami Idea 20 2.3.4 History BankIslami 21 2.3.5 Accreditation by State Bank of Pakistan 23 2.3.6 Initial Public Offering of BankIslami 23 2.3.7 Network Expansion 2.4 Vision 24 2.5 Mission 24 2.6 Core Values 24 12 12 12 13 13 13 13 14 Page No.

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Chapter #3 Product, Services & departments 3.1 Introduction 28 3.2 Departments 30 3.2.1 Operations Department: 30 3.2.1.1 Nature of the deposits 30 3.2.1.2 Kinds of Accounts 34 3.2.1.3Procedur es for account opening 35 3.2.2 Remittances Department 37 3.2.3 Cash Department 38 3.2.3.1 Kinds of cheques 39 3.2.4 Credit Department 40 3.2.4.1 Musharakah Financing 40 3.2.4.2 Mudarabah Financing 40 3.2.4.3 Working Capital Finance 40 3.2.4.4 Project Financing 42 3.2.5 Consumer banking 42 3.2.5.1 Online Banking 42 3.2.5.2 Inter Bank Tr ansfer Fund 43 3.2.5.3 ATM or Debit Card 43 3.2.5.4 Biometr ic ATM 43 3.2.5.5 Lockers 44 Chapter #4 Analysis 4.1 Financial information: 46

4.2 Analysis of the Report 47 4.2.1 Financial Statement Analysis 47 4.2.1.1 Common Size Analysis 47 4.2.1.1.1 Vertical Analysis of Balance Sheet 50 4.2.1.1.2 Vertical Analysis of I ncome Statement 52 4.2.1.1.3 Horizontal Analysis of Balance Sheet 52 4.2.1.1.4 Horizontal Analysis of Income Statement 53 4.3 Financial Ratio Analysis 54 4.3.1 Profitability Ratio 54 4.3.1.1 Gross Profit Margin 4.3.1.2 Net Profit Mar gin 4.3.1.3 Return on Assets 4.3.1.4 Return on Equity 4.3.1.5 Earning per Share

54 55 55 55 55

4.3.1.6 Operating cost to income ratio 4.3.4.7 Debit to Equity Ratio 56 4.3.4.8 Debit Ratio 56

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4.4.2 Efficiency Ratio 57 4.4.2.1 Interest income per employee 4.4.2.2 Profit per employee 57 4.4.2.3 Business per employee 57 4.4.2.4 Business per branch 57 4.4.2.5 Employee per branch 58 4.4.3.6 Total Advances to total Deposit Ratio 4.4.3.7 Total advances to total Assets 58 4.4.3.8 Fixed Assets to Total Assets 58 4.4 SWOT Analysis 59 4.4.1 Strength 69 4.4.2 Weaknesses 60 4.4.3 Opportunity 61 4.4.4 Threat 62 Chapter # 5 5.1 CONCLUSION 5.2 RECOMMENDATION Reference s 66 LIST OF TABLES 63 64

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Table 4.1 Financial information 45 Table 4.2 Profit &loss Account 45 Table 4.3 Financing 46 Table 4.4 Common Size Ver tical Analysis of Balance Sheet 50 Table 4.5 Common Size Ver tical Analysis of Income Statement 51 Table 4.6 Common Size Horizontal Analysis of Balance Sheet 52 Table 4.7 Common Size Horizontal Analysis of Income Statement 53 Figure 2.1 Organizational Structure 27

Figure 3.1 Bankislami Branch Organizational Chart 28

Acknowledgement
First of all I am ver y thankful to my Almighty Allah who gave me courage and patience to complete this task. I would like to express my profound gratitude, most sincere appreciation and special thanks to my supervisor Mr. Zafar Iqbal for his fabulous suggestion, valuable advice and continuous encouragement through the completion of report. I highly appreciate the help and cooperation of the Mr. Muhammad Fasyal Manager of BankIslami Jhelum Branch. I am also thankful to the Staff members of BankIslami, Jhelum Branch for their continuous help and guidance dur ing my internship with them. I must thank to all my fr iends and teachers who did extend their valuable support and priceless suggestions during working on report. Finally I wish my deepest appreciation to my respectable parents and family members who are the strength of my life, who have motivated me in all phases of life, for their long loving support, their patience, their understanding and their prayers.

Abbreviations

A&IG : ATM : DD : EVP F.I : GOP : I.T :

Audit Group

&

Inspection

IBR : J/V : MT :

NBP : NCB : NIT :

ROA : ROE : SAM

Automated Teller Ma chine Demand Draft : Executive Vice president Financial Institute Government Of Pakistan Information Technology Inter Branch Reconciliation Joint Venture Mail transfer National Bank of Pakistan National Commercial Bank National Investment Trust Return On Assets Return On Equity

:Special Assets Management SBP : State Bank of Pakistan SEVP : Senior Executive Vice president SWOT : Strength Weakness Opportunity threat TT : Telegraphic Transfer USA :United States of America WTO : World Trade Organization

Executive Summary
Banking has always been the main field of interest for most of the students of business

administration. It is also an academic requirement to undergo internship therefor e the main purpose behind this report is partial fulfillment of r equirements, for the degree of MBA. The objective is that report encompasses the exper ience of the internee, his/her learning, and analysis in light of which recommendations are made. In the first chapter introduction to the report, background of study, scope of the study and mer its of the study are given. The second chapter is about introduction to the organization, its historical background, how it came into being, what the major reasons behind it were and what areas of banking it covers. Corporate profile of the bank consisting of Board of Directors, audit committee legal advisors. The organizational structure of BankIslami, its core values, financial highlights all are provided in this chapter. The third chapter is the major portion of the report. The areas covered in financial management are applied to overview the working of BankIslami Jhelum Branch. In this chapter internee discussed the departments in the branch and their functions, types and natur e of account and procedures used to open accounts etc. What procedures are used to receipt and pay the cash, what kinds of cheques are used by the customers to draw money? Then in advances department the types of advances given to different types of customer are discussed. And then finally the clear ing procedure is discussed in this chapter. The fourth chapter of the report covers the analysis of report and the findings that were seen. Financial statement analysis and SWOT analysis of the organization was done as it acts as a mirror for the management to know the financial condition, strengths and weaknesses so that it can take appropriate corrective actions. The management should know the weak areas and should develop elaborate plans for capitalizing on the available opportunities.

The end of the report is about recommendations and conclusion.

Chapter # 1 Introduction study: to

1.1 Back ground of studies As part of the course out line of MBA (Master Business Administration) of the students are required to under go 8 weeks of internship with an organization. The internship is to serve the purpose of acquainting the students with the practice of knowledge of the discipline of business administration. This report is about Bank Islami. Bank Islami was established in 2004 and since then, it has expended its network, becoming the Islamic Bank of the country. It offers different products of services to its customers. 1.2 Purpose of the studies The main of the study in hand is together relevant information to compile internship report on BankIslami 1. To observe, analyze and interpret the relevant data competently and in a useful manner. 2. To work practically in an organization. 3. To develop interpersonal communication. 4. This report is an essential and academic requirement for the fulfillment of the degree. 5. To what extent the practical things differ from the theory. 6. To analyze the activities prefor med by the bank during the internship, 1.3 Research Methodology The report is based on my two months internship program in Bank Islami, jhelum branch. The methodology reported for collection of data is primar y as well as secondary data. The biggest source of information is my personal observation while working with staff and having discussion with them. Formally arr anged interviews and discussions also helped me in this regards.

1.3.1 Primary data: Personal observation Interviews of staff Staff at night position in bank Staff at circle office. 1.3.2 Secondary data: Manuals Journals Magazine Annual reports 1.4 Scope of studies As an internee in Bank Islami the main focus of my study research was on general banking procedures in one of the branches of Bank Islami. These operations include r emittances, deposits, and to small extent foreign exchange and advances. Similarly different aspects of overall of Bank islami are also covered in this report. 1.5 Merits of the study This report proves beneficial to all the finance students because it almost contain all the infor mation about the finance department of BankIslami. So one can easily understand to what extent the theory is different from practical implications. 1.6 Limitation of the study The report does not contain all the facts and figures about the area under study due to certain limitations. Most of the data related to financial practices is confidential. And thats why access to that information was a difficult task. Another factor is the time limitations. As the internship is of six weeks thats why havent so much time to study all aspects and details. Despite of these the report encompasses all the information required.

This r eport so doesnt include detailed descr iptions of the BankIslami as a whole but its financial issues, policies and branch of BankIslami in Jhelum is new established. 1.7 Scheme of study The report is divided in to 6 chapters. Chapter 1 headed the introduction study, which include Background of study, purpose of study, scope of study, methodology of study. 2nd chapter head the Introduction of Bank, which include, evaluation of Banking Or igin of Banking, banking in developing countries, development of Banking in Pakistan. History of Bank Islami, contribution to National development, role in both Private and Public sector and its growth up 2000. Chapter-3 is headed by DEPARTMENTATION which includes the Deposit department, cash department, remittances department, clearing accounts department, advances department and Foreign exchange depar tment. Chapter 4 is headed by Financial analysis which include Ratio Analysis and also SWOT Analysis. Chapter 5 consists of Critical Analysis, conclusion and recommendation.

Chapter # 2 Introduction BankIslami:


2.1 Introduction Banks play ver y important role in the economic lif e of the nation. The growth of the economy is closely related to the soundness of its banking system. Although banks create no new wealth but they borrow, exchange and consume wealth. In this way, they become very effective par tners in the process of economic development. Modern banks are very useful for the utilization of the resources of the country. The basic role of the banks is to encourage the habit of savings among the people and to mobilize these savings for the investment purpose. Banks deposit sur plus from the public and then advance these surplus in the for m of loans to the industrialists, agriculturists, businessmen and unemployed people under different schemes so that they set up their own business. Thus banks help in capital formation. If there are no banks, then there would be concentration of wealth in few hands and the great portion of capital of the country would remain idle. In the fewer developing countries rate of saving is ver y low and due to this, rate of investment and rate of economic gr owth remains very much low. We can take bank just like a heart in the economic structure and the capital provided by it is like blood in it. As long as the blood is in circulation, the organs will remain sound and healthy. If the blood were not provided to any organ then that organ would become useless. So if the finance is not provided to agriculture sector or to industrial sector, it will be destroyed. Loan facility provided by the bank works as an incentive to the producer to increase production. Banks provide transfer of payment facility, which is cheaper, quicker, and safe. Many difficulties in the international payment have been overcome and volume of transactions has been increased. These facilities are very much helpful for the development of trade and commerce.

to

Banki

ng

&

2.1.1 Banking Industry in Pakistan Banking is one of the fastest growing industr ies but it is one of the most sensitive businesses all over the world. Banks play very important role in the economy of a country and Pakistan is no exemption. Banks are custodian to the assets of the gener al masses. In our lifetime, we use plenty of banking products that were pr eviously not available to the ordinary person. Most of us have credit cards, loans, and we have the insurances. This has banking a much more competitive Industry, and we have the r ight to expand great services for our custom. The banking sector plays a significant role in a contemporary world of the money and economy. It influences and facilitates many different but integrated economies activities like mobilization, poverty elimination, production and distribution of public finance. If it is purchasing a car or building a home; banks are always play there are serve better. It is play ground or any educational or healthy societal activity the money of banks nurtures them. In an industrial project or agricultural development of the country the sponsor -ship of banks is very much involved. Banks play very important role in the over all economic development of the country. Pakistan Banks Association (PBA) r epresents the Pakistan Banking Industry. Established in 1953, its main objectives are to coordinate the efforts of the banking industry, and to share common vision of progress and development with its members. Pakistan has a well-developed banking system, which consists of a wide variety of institution ranging from central bank to commercial banks and to specialized agencies to cater for special requir ement of specific sectors. The country started without any worthwhile banking network in 1947 but witnessed phenomenal growth in the first two decades. By 1970, it acquired a flour ishing banking sector. 2.1.2 Growth of Pakistan s Banking Industry Pakistan is a developing country and in the recent year the banking industr y in Pakistan has been transformed from state owned sector to vibrant sector industr y. Banking industry has not only gained strength from positive inter play of economic and political factors also become an engine of growth for economy. Growth of SMEs in Pakistan is increasing at very r apid pace. SMEs constitute 90% of business in Pakistan. SMEs represents a significant component of Pakistans economy in term of value addition, employment generation and pover ty reduction activities.

The money supply during July- April 22, 2006 of the curr ent fiscal year expanded by Rs.294.9 billion as against of Rs.332.4 billion in the same period of the last year. The credit to the private sector increased substantially; it grew by 20.2 % (Rs.345.1 billion) during July-April 22, 2006 compared with the growth of 28% or Rs.357.4 billion. In the current fiscal year, curr ency in circulation increased by 13.6% against last year of 17%. Strong demand of Treasur y bills that are offered Rs1058 billion and accepted Rs.688.8 billion. Performance of Domestic as well a foreign bank is increasing as compared to previous years. Domestic banks are 7301 and Foreign Banks are 105 Banks in year 2005. Strong monitoring and credit control measures has been made by SBP. Ther e are weak Functional strategies within and among financial institutes, like co-ordination, communication. There is a lack of system to solve the banking crises. The challenge facing the financial sector is transfor ming the existing interest based system into Riba free system. The Supreme Court of Pakistan has given its verdict and also set the deadline, June 30, 2001, for completing the transformation according to Islamic Conjunction (Shariah). In 2007 economic recession allover world af fects all business sectors including banking sector . Therefore growth of banking sector slow due to economic recession and challenges like terrorism as compared to past years 2.1.3 Banking Law in Pakistan All banks are following a certain law, and they are working under the Banking ordinance 1962 and controlled by State Bank of Pakistan. The or dinance named as the banking companies ordinance, 1962 ordinance LVII of 1962(7
th

June, 1962). This ordinance was designed to

consolidate and amend the law relating to banking companies. 2.1.4 State Bank of Pakistan (Central Bank) The guiding principal of State Bank which is the central bank of Pakistan is that, it acts only in the public interest and for welfare of the community as a whole and without regards to profits a primary consideration. As all the banks are following the defined set of rules and procedures (SOPS) standard operating procedures, same as Bankislami limited is also doing so while dealing with accounts, cash, remittance, clear ing, finance, auto loans etc. as if any one doesnt follow the rules hen future of the bank can be in wild darkness.

2.2 Banks in Pakistan Ther e are three types of banks, serving in Pakistan as; Government banks Private banks, and Foreign banks 2.2.1 Government banks The per iod of 1990s took a revolution in the sectors of privatization, deregulation and restructuring in the domestic banking industry and financial institutions. The Muslims Commercial Bank was the first bank to privatize. One good thing for the particular period was the recruitment of the fresh officers in the domestic banking industr y through well- organized policies of the Banking Council. Gover nment banks include; NATI ONAL BANK OF PAKISTAN(NBP) FI RST WOMEN BANK LIMITED(FWB) THE BANK OF PUNJAB(BOP) THE BANK OF KHYBER (KM) 2.2.2 Private Banks The Government of Pakistan per mitted small pr ivate sector banks to operate, which indulged in doubtful policies to promote business. These banks include; ALLIED BANK PICIC COMMERIAL BANK LIMITED MUSLIM COMMERIAL BANK LIMITED UNITED BANK LIMITED BANK AL-FALAH LIMITED UNION BANK LIMITED ASKARI COMMERIAL BANK LIMITED MY BANK LI MITED SAUDI PAK BANK COMMERIAL LIMITED SAUDI PAK BANK COMMERIAL LIMITED BANK AL HABIB LI MITED PRIME COMMERIAL BANK LIMITED

FAYSAL BANK LIMI TED, etc 2.2.3 Foreign Banks Due to the policies by Pakistani Government, many foreign banks are getting influenced and started entering into the business in Pakistan, as the economic condition and SOPS by bank and Pak government are favorable for new entrants but this has reduced the profitability of the local banks. Foreign banks include; CITI BANK STARDARD CHARTED BANK ABN AMRO BANK HONG KONG SHANGHI BANKING CORPORATION (HSBC) DUBAI ISLAMIC BANK NIB BANK, etc All the foreign banks of the country are busy to invest heavily in the field technology and ecommerce in order to overcome branch limitation. All the domestic and foreign banks vigorously institutionalizes consumer financing in the country and ear ned handsome profits.

2.3 Introduction to the BankIslami 2.3.1 What is BankIslami? Islamic banking has been defined as banking in consonance with the ethos and value system of Islam and governed, in addition to the conventional good governance and risk management rules, by the principles laid down by Islamic Shariah. Interest free banking is a narrow concept denoting a number of banking instruments or operations, which avoid interest. Islamic banking, the more general term is expected not only to avoid interest based transactions, prohibited in the

Islamic Shariah, but also to avoid unethical practices and participate actively in achieving the goals and objectives of an I slamic economy. 2.3.2 Competition Situation BankIslami is the Joint venture project of 3 groups with 18.75% equity each, namely Jahangir Siddiqui & Co. Pakistan, DCD Group UK, & Dubai Bank. Irrespective of stiff competition in the market the Bank has successfully managed to grow over 400% during last one year and all set to be a 100 Online Branch Network by the year end 2008. The same was achieved by the existing largest player in the Islamic Banking Industry Meezan Bank in 6 years time at December 2007. BankIslami has become a hallmark of innovation and bringing new products and services in the market and by intr oducing the Bio-Metric ATM facility it became the first bank of the region to offer such services and till date no bank has been able to replicate this service. 2.3.3 BankIslami Idea The epochal idea of BankIslami was conceptualized by Jahangir Siddiqui & Company Limited and DCD Group in late 2003. Mr. Hasan A. Bilgrami was appointed as Adviser to the sponsors on March 16, 2004 to formalize the idea. He presented the concept paper of BankIslami to sponsors on March 24, 2004. A detailed business plan was then prepared and a formal application was submitted to the State Bank of Pakistan on May 26, 2004. On September 26, 2005, Dubai Bank joined the Sponsors and became one of the founding shareholders of BankIslami by investing 18.75% in the total Capital.

2.3.4 History BankIslami Steps for Islamization of banking and financial system of Pakistan were started in 1977-78. Pakistan was among the three countries in the world that had been trying to implement interest free banking at comprehensive/national level. But as it was a mammoth task, the switchover plan was implemented in phases. The Islamization measur es included the elimination of interest from the oper ations of specialized financial institutions including HBFC, ICP and NIT in July 1979 and that of the commercial banks during January 1981 to June 1985. The legal framework of Pakistan's financial and corpor ate system was amended on June 26, 1980 to permit issuance of a

new interest-fr ee instrument of corporate financing named Participation Term Certificate (PTC). An Ordinance was promulgated to allow the establishment of Mudaraba companies and flotation of Mudaraba certificates for raising r isk based capital. Amendments wer e also made in the Banking Companies Ordinance, 1962 (The BCO, 1962) and r elated laws to include provision of bank finance through PLS, mark- up in prices, leasing and hir e purchase. Separate Interest-free counters started operating in all the nationalized commercial banks, and one foreign bank (Bank of Oman) on January 1, 1981 to mobilize deposits on profit and loss sharing basis. Regarding investment of these funds, bankers were instructed to provide financial accommodation for Government commodity operations on the basis of sale on deferred payment with a mark-up on purchase price. Export bills were to be accommodated on exchange rate differential basis. In March, 1981 financing of import and inland bills and that of the then Rice Export Corporation of Pakistan, Cotton Export Corporation and the Trading Corporation of Pakistan were shifted to mar k-up basis. Simultaneously, necessary amendments were made in the related laws permitting the State Bank to provide finance against Participation Term Certificates and also extend advances against promissory notes supported by PTCs and capital needs of trade and industry on a selective basis under the technique of Mudaraba Certificates. From July 1, 1982 banks were allowed to provide finance for meeting the working Musharaka.

As from April 1, 1985 all finances to all entities including individuals began to be made in one of the specified interest-free modes. Fr om July 1, 1985, all commercial banking in Pak Rupees was made interest-free. From that date, no bank in Pakistan was allowed to accept any inter estbear ing deposits and all existing deposits in a bank were treated to be on the basis of profit and loss sharing. Deposits in current accounts continued to be accepted but no interest or share in profit or loss was allowed to these accounts. However, foreign currency deposits in Pakistan and on-lending of foreign loans continued as before. The State Bank of Pakistan had specified 12 modes of non-interest financing classified in three broad categories. However, in any particular case, the mode of financing to be adopted was left to the mutual option of the banks and their clients. The procedure adopted by banks in Pakistan since July 1 1985, based largely on mark-up technique with or without buy-back arrangement, was, however, declared un-Islamic by the

Federal Shariat Court (FSC) in November 1991. However, appeals were made in the Shariat Appellate Bench (SAB) of the Supreme Court of Pakistan. The SAB delivered its judgment on December 23, 1999 rejecting the appeals and directing that laws involving interest would cease to have effect finally by June 30, 2001. In the judgment, the Court concluded that the pr esent financial system had to be subjected to radical changes to br ing it into confor mity with the Shariah. It also directed the Government to set up, within specified time fr ame, a Commission for Transformation of the financial system and two Task Forces to plan and implement the process of the transfor mation. The Commission for Transformation of Financial System (CTFS) was constituted in January 2000 in the State Bank of Pakistan under the Chairmanship of Mr. I.A. Hanfi, a former Governor State Bank of Pakistan. A Task Force was set up in the Ministry of Finance to suggest the ways to eliminate interest from Government financial transactions. Another Task Force was set up in the Ministry of Law to suggest amendments in legal fr amework to implement the Courts Judgment. The CTFS constituted a Committee for Development of Financial Instruments and Standardized Documents in the State Bank to prepare model agreements and financial instruments for new system. Accordingly, the State Bank issued detailed cr iter ia in December 2001 for establishment of fullfledged Islamic commercial banks in the private sector. Al Meezan Investment Bank r eceived the first Islamic commercial banking license from SBP in January 2002 and the Meezan Bank Limited (MBL) commenced full-fledged commer cial banking operation from March 20, 2002. Fur ther, all for malities relating to the acquisition of Societe Generale, Pakistan by the MBL wer e completed, and by June, 2002 it had a network of 5 branches all over the country, three in Karachi, one in Islamabad and one in Lahore. The MBL now maintains a long ter m rating of A+ and short term rating of A1+, assessed by JCR VIS Credit Rating Co Ltd, signifying a consistent satisfactory per for mance. The Government as also the State Bank is mainly concerned with stability and efficiency of the banking system and safeguarding the interests, particular ly, of small depositors. With this concern in mind it has been decided to operate Islamic banking side by side with traditional banking.

2.3.5 Accreditation by Stat e Bank of Pakistan The State Bank of Pakistan issued a No Objection Certificate in no time on August 19, 2004 and BankIslami Pakistan Limited, the second full-fledge Islamic Commercial Bank in Pakistan, was incorporated on October 18, 2004 in Pakistan. BankIslami Pakistan Limited was the first Bank to receive the Islamic Banking license under the Islamic Banking policy of 2003 on March 31, 2005. The Bank envisioned focusing primarily on Wealth Management as the core area of business in addition to Banking pr oducts, Proprietary and Third party products. 2.3.6 Initial Public Offering of BankIslami BankIslami Pakistan Limited made a public offering of Rs. 400 Million, at par, from 6th to 8th March. This was the fir st primar y issue by a Bank in over a decade in Pakistan. The Initial public offering (IPO) of BankIslami received overwhelming response from the general public as the applications received were 9 times higher than offered, fetching near ly Rs. 3.5 Billion, against the demand of Rs. 400 Million. 2.3.7 Network Expansion The State Bank of Pakistan declared BankIslami Pakistan Limited as a Scheduled Bank with effect from Mar ch 17, 2006. BankIslami started its Banking operations on 7th Apr il 2006 with its first branch in SITE, Karachi. By the end of 2006, the Bank had 10 branches, nine in Karachi and one in Quetta. The Bank further concentrated in building a nationwide network and by the end of year 2007, its branch networ k grew to 36 branches in 23 cities. In 2008, the Bank opened 66 new branches nationwide which expanded its network to 102 branches in 49 cites. This gives BankIslami the distinction of having the fastest expanding network in Pakistan as well as offering the widest network by any Islamic Bank in Pakistan. 2.4 Vision: The Vision of BankIslami is to be recognized as the leading Authentic Islamic Bank. 2.5 Mission: The Mission of BankIslami is to create value for our stakeholders by offering Authentic, Shariah Compliant and technologically advanced product and services. We differentiate ourselves through: Authenticity Shariah compliant Retail

Innovation Understanding our client's needs Commitment to excellence, and Fast, efficient and seamless delivery of solution. As a growing institution, the foundation for our performance lies on our human capital and BankIslami remains committed to becoming an employer of choice, attracting, nurturing and developing talent in a transparent and performance driven culture. 2.6 Core Values: BankIslami is strongly committed towards its core values of: Product authenticity Customer focus Meritocracy Integrity Team work

]2.7 Structure of BankIslami: Board of Directors Chief Justice (Retd.) Mahboob Ahmed Mr. Ahmed Goolam Mahomed Randeree Mr. Ahmed Mohammed EI Shall Mr. Ali Raza Siddiqui Mr. Hasan A. Bilgrami Officer Mr. Mohamed Amir i* Mr. Shabir Ahmed Randeree Sharia'h Supervisory Board Justice (Retd.) Muhammad Taqi Usmani Professor Dr. Fazlur Rahman Member Mufti Irshad Ahmad Aijaz Member & Sharia'h Adviser Chair man Chief Executive Chair man

Audit Committee Mr. Ahmed Mohammed EI Shall Chair man Mr. Ali Raza Siddiqui Mr. Shabir Ahmed Randeree Executive Committee Chief Justice (Retd.) Mahboob Ahmed Mr. Ahmed Goolam Mahomed Randeree Mr. Ahmed Mohammed EI Shall Chair man Member Member Member

Member

Mr. Hasan A. Bilgrami Member Human Resource & Compensation Committee Mr. Ali Raza Siddiqui Mr. Ahmed Mohammed EI Shall Mr. Member Hasan A. Chair man Member Member Bilgrami Mr. Ahmed Goolam Mahomed Randeree

Chapter #3 PRODUCT, SERVICES & DEPARTMENT


3.1 Introduction BankIslami Jhelum br anch is newly opened branch in jhelum city, also bankIslami history is not to much old. Its all about to 5 to 6 year old. The organization of BankI slami Jhelum branch is a complete banking system but it is covering modern technologies like ATM. This banking system is collection of interrelated departments that works together to achieve the objectives of the organization. BankIslami is a hierarchical system in that it includes other sub departments and these are integrated to work together. In the internship of six weeks the internee worked in different departments to see how the practical work is done and compared it with the theories she studied dur ing her bachelor courses.

Each department has its own importance and value to the organization. But the basic thing was that departments have to integrate to improve the performance.

Figure 3.1 BANKISLAMI BRANCH ORGANIZATIONAL CHART

Clearing Department Remittances Department Operations Manager Account Opening


Department

Cash
Department

Bills
Department

Manager
Coordination

3.2 DEPARTMENTS: BankIslami Jhelum branches divided into different departments. Credit Department Operations Department Consumer Banking. a) Credit Department The main purpose of this department is to extend loans to its clients for the productive purpose. Credit Department is also called Corporate Banking Group. Bank can offer different type of financing in ther e branches. This type of financing are based upon Islamic mode of financing. Just like MUSKUN home financing, Islami Auto Ijara-new vehicle and same with imported vehicles. b) Operations Department: Operations depar tment of the BankIslami is responsible for the overall operations of the bank, Customer Services Department, Remittance Department, Clearing Depar tment, Accounts Department, etc. all come under it.

c) Consumer Banking Consumer banking is the Marketing Department of the BankIslami. At BankIslami, consumers are treated very well. They ar e of the opinion that customers must be satisfied with the services provided by the Bank. All of the Branches try to make sure that customers are satisfied with the services being provided by the Bank. 3.2.1 Operations Department: BankIslami accounts are same as other commer cial banks accounts but in some accounts they can offer Islamic mode transactions. Accounts are given below. 3.2.1.1 Nature of the deposits Bank deposits can be broadly classified as Islami current Accounts Islami foreign current Account Islami Bachat account Islami Mahana Munafa Account Islami Amadni Certificate a) Islami current Accounts With our Islami Current Account, you can have complete peace of mind that your funds are safe and utilized inHalal avenues only. Islami Current Account is ideal for customers who have frequent transaction needs and require unlimited access to their account to meet their personal or business expenses. Also, you have access to our entire online network of for convenience of instant and secure intercity transactions. So enjoy full control over your funds in a Shariah compliant manner. A minimum balance of Rs. 1,000/- only to open the account Joint Account facility up to four joint account holders Access to the entire online branch network Fr ee unlimited online intercity transactions Fr ee 1 Card, BankIslami's ATM & Debit card Access to all ATMs linked to MNET and 1 Link throughout Pakistan InterBank Funds transfer facility through ATM

Facility of making instant payments at Or ix terminals for grocery, fuel ,dining and other purchases Fr ee Internet Banking service Fr ee Account statement facility Hold mail and Stop payment facility b) Islami foreign current Account BankIslami Islami Foreign Currency account is ideal for businesses and individuals who would like to diversify their investment in different currencies to ensure security against currency fluctuations or want to keep foreign currency account to meet their business needs. Also, you can have easy access to foreign currency with no hassles of foreign exchange conversion when you have to travel abr oad or remit funds abroad to meet education, leisure or business needs. Safe Deposit Lockers Hold Mail & Stop payment facility A minimum balance of USD 100/-or equivalent in GBP or EURO to open the account Joint Account facility up to four joint account holders Available in USD, GBP & EURO Fr ee Account statement facility Fr ee Internet Banking service c) Islami Bachat Account Our Islami Bachat account is a bundle of benefits. It helps you keep up with your tradition of savings with the convenience and safety of a professional and understanding bank. Also, you ear n highly attr active profits on your savings with the flexibility of making as many transactions on your account as you want. Islami BachatAccount is ideal for customers who need to dr aw money for monthly expenses but would also like to earn on your hard earned savings. Corpor ate Employers can also avail this account to provide convenience, flexibility and halalprofits to their employees by opening their salary accounts with us. Monthly profit/loss payment on daily product basis Differential and specific pool allocation possible for large deposit holders Profit announcement at the end of ever y month A minimum balance of Rs. 5,000/- only to open the account

Joint Account facility up to four joint account holders Access to the entire on line network of 102 Branches in 49 Cities Unlimited over the counter deposits and withdrawals, free of charge No restrictions on intercity transactions Fr ee 1 Card, BankIslami's ATM & Debit card Access to all ATMS linked to MNET and 1 Link throughout Pakistan Facility of making instant payments at Or ix terminals for grocery, fuel ,dining and other purchases Fr ee Internet Banking service d) Islami Mahana Munafa Account Long term investments yield high r etur ns but delayed profit payment. With our Islami MunafaAccount you don't compromise on any. Now you can enjoy the freedom of Mahana halal

monthly gains for a prosperous present while building your wealth for a secur e future. Also, Islami Mahana Munafa Account will provide you with security, convenience and flexibility of investment tenure to suit your needs. Fr ee Internet Banking Service Hold Mail & Stop payment facility Safe Deposit Lockers 100% interest free Available in Pak Rupees Tenur e of investment are 1, 2, 3, 5 & 10 years Minimum amount of investment is Rs. 10,000/- only Profit/loss payment on monthly basis until the matur ity date Payment of amount of investment on the matur ity date Differential and specific pool allocation possible for large deposit holders Profit announcement at the begining of every month Fr ee facility of transfer of profit and invested funds in nominated Islami Current or Islami Bachat Account Monthly profit/loss payment on daily product basis Fr ee Six monthly Account Statement facility

e) Islami Amadni Certificate Why take interest when you can earn Halal profit on your investment. With Islami Amadni Certificate your hard ear ned investment works harder to yield high expected profits so you can build your wealth for a prosperous futur e. You get the best of both worlds in a safe, secure and flexible package to perfectly meet your needs. If you are a salaried individual, a businessperson or a corporate entity with some long term investment funds to spare, our Islami Amadni certificate is an ideal solution for you. With our Islami Amadni Certificate, the higher your investment the higher will be your return and that too in a Shariah compliant manner. Also, you have the flexibility to choose amongst various investment tenures to suit your personal or business needs. Islami Amadni Certificate offers you the following key salient features: Available in Pak Rupees Investment can be done for 1, 3, 6, 12, 24, 36 or 60 months Minimum amount of investment is Rs. 10,000/- only Payment of profit/loss and amount of investment on the matur ity date Quarterly profit payment for investment of 12 months and above Differential and specific pool allocation possible for large deposit holders Profit announcement at the end of ever y month Fr ee Account statement facility Fr ee facility of transfer of profit and invested funds in nominated Islami Current or Islami Bachat Account Fr ee Internet Banking service having free Term deposit enquir y facility Facility of premature encashment available. In such a case, the corresponding period weightage would apply, unless stated otherwise

3.2.1.2 Kinds of Account s Accounts can be classified in the following types Individual accounts Joint accounts Partnership accounts

Minor accounts a) Individual Accounts Individual accounts are the account, which is opened and operated by a single person. Before opening the account bank sees proper identity and introduction of the individual. Individuals instructions are strictly observed in operation of the account.

b) Joint Account Two or mor e persons who are neither partner s nor trustees can open this type of account. At the time of opening account specials instructions are taken by the account holders that who is going to operate the account they are asked whether it will be operated singly or jointly and to whom the balance will be tr ansferred at the death of an account holder on the basis of either or survival. If the joint account holder wishes to delegate their authority to operate on the account to an outside party all the joint parties should sign this authority. c) Partnership Account Partnership accounts are opened in the name of the business e.g. M/S ABC Electronics etc. for opening of this account a partnership deed NIC required. Bank staff acquires special instructions by all par tners for the operation of the account. Partnership account can only be opened in the form of a current account d) Minor Account The contr act act 1872 has disqualified a minor fr om entering into a contract except the one for his necessities. According to Pakistan Law a person is regar ded as a minor until he has attained the age of 18 years. However under section 3 of majority act 1875 if a competent court of law appoints a guardian of his person or property before his 18 years the majority extends to the age of 21 years. Bankers in Pakistan have allowed the opening of minors account only with the idea of inculcating in them the habit of saving. So guardian requests in the name of the minor for opening of an account. There are other accounts, which are called specialized accounts. These are given below. Joint stock account

Accounts of clubs, societies and associations Agent accounts Executors and administrators accounts Pak rupee non-resident account 3.2.1.3Procedures for account opening In order to operate an account with the bank, a customer has to open an account. In large branches Grade 1, II or III officers is made responsible for opening new accounts. However in small branches, the manager himself fulfills all the formalities for opening new accounts. It is necessar y because in case of fraud unintended over draft, or negligence, the bank will have a source to trace out the customer. Such source is established by asking the customer to br ing an existing customer of the bank that will introduce him to the bank. In order to protect against losses resulting from fraud or unintended overdraft the account opening activity has been formalized through certain steps. These steps include Formal Application : Customers are requir ed to fill in the prescribed account opening form, which the bank provides to the customers free of cost. In this basic infor mation about himself is provided by the customer like his name, address, occupation and nature if account he wants to operate. Obtaining introduction: I ntroductory references are quid pro quo for opening the account. For this it is necessary that an existing customer verify the authenticity of the facts provided in the account opening for m. Specimen Signature : The customer gives the banker a specimen signature generally taken on a card specially designed for this purpose. Name of the customer and account number are entered on it. This specimen signature is used later on by the bank to ver ify the signature on cheques drawn on the bank by comparing these signatures on the card and the other on the cheques. Minimum Initial Deposits: The customer has to make a certain minimum deposits to open an account. However, later on customer can withdrawn part of this amount but must maintain minimum deposits to avoid closure of the account or service charges.

Operating the Account: When the account is opened banker customer relationship is established. The customer in order to be able to operate the account is given the following documents: Pay-In-Slip Book: This book is issued to the customer containing slips upon which money is deposited. Each slip contains blank spaces for amount, account number, date, depositor signature and name of the account holder . Cheque Book: The customer to withdraw the money from the bank uses Chequebook. Chequebook consists of 10, 25, 100 leaves. When new cheque book is required by the customer he has to fill in the cheque book requisition slip with two signature on it and give it to the concer ned officer who on verification of the signature will issue new cheque book. Qualification of the Customer: The relation of the banker and the customer is pur ely a contractual one. Therefore any person who is capable of entering into a contract according to the Section 11 of the contract Act 1872 can be a customer. However the following qualifications are necessary for a person to become a customer. He must be of the age of majority He must be of sound mind He must not be disqualified under any law. 3.2.2 Remittances Department One of the important functions of a bank is to transfer funds for customers from one location to another. Remittances department deals with the tr ansfer of money for customer from one bank to another or fr om one branch to another. Instrument used by the BankIslami for remittances includes: Telegraphic transfer Demand dr aft Mail transfer Pay order a) Telegraphic Transfer Telegraphic transfer is one of the quickest modes of transferr ing funds. It is an electronic system of transfer ring funds that is why it is used by most of the businesses for the purpose of transferr ing funds.

b) Demand Draft A draft is just like an order cheque. A draft is drawn by one branch of a bank upon the other branch of the same bank. The late down procedure is that the sender has to fill the beneficiary name, account number and his name in the form. After the deposit DD is given to the customer and transaction is registered in the issuing register and an advice is sent to the branch to which the DD is sent. It is common mode of fund transfer. It is different from telegraphic transfer and in sense that funds ar e not immediately to the collecting branch and the receipt of the branch. The collecting branch will credit the account of the beneficiary at the receipt of advice from the paying branch. Demand dr aft can be open, which can be cashed at cash counter after properly identifying the true beneficiary, or crossed which can only be cashed by crediting is to the account of the beneficiary. c) Mail Transfer Mail transfer (MT) is same as Demand Draft, but the characteristic which makes it different from Demand Draft that in case of demand draft bank physically hands the DD to the customer and upon presenting the draft the amount can be withdrawn. But as regards the mail transfer one branch sends instruction to the other branch ordering it to the credit the amount to the account of the person in whose favor the amount is deposited. d) Pay Order Pay order is the most convenient, simple and secure way of transfer money. It is just like demand draft except that pay or der is made for local or der of money where as demand draft is meant for remittances of funds from one city to other.

3.2.3 Cash Department


Cash department basically handles cash receipts and cash payments. The procedure for which is given below a) Receipts Cash department receives money from customers for crediting it to their respected accounts for which then used for paying their bills or remitting to their creditors and suppliers as the case may be. When depositing cash the client fills the prescribed form of pay and slips wher e in he provides basic information like the amount to be deposited, date, account nature and number etc. then he hands over the form and paying slip along with the money to the cashier to the counter.

The cashier signs and stamps the form or paying slips and returns one copy of the same to the depositors. After the hours, all pay and slips to the computer section, which credits the same, their respective accounts.

b) Payments When bank receives money from customer s, it undertakes to repay the same upon demand. The money can be withdrawn through cheques, drafts or pay orders. However before making payments, bank satisfies itself that the instrument is valid and there is sufficient balance in the customer account to support the payment. For making payments the procedure followed. Cheque is first presented to token clerk. Token clerk notes down date, amount on the cheque, and account number in token register, assign token number to cheque on the back of it gives token to the customer and then forwards the cheque to an officer to the check the signature and ver ify it with signature on specimen card which the customer signed at the time of opening the account. The cheque is then forwarded to the computer department for ver ification of the balance. The cheque is then forwarded to the cashier who makes payment to person who presents the token. The process may differ from what mentioned above depending the nature of cheque. A cheque is def ined as written order of a depositor to pay to or to order of a designated party or bearer, a specified sum of money on demand. 3.2.3.1 Kinds of cheques Basically there are three types of cheques. They are as follows. Bearer cheque: It is en cashable at the counter. Payments of the cheque can be made to any people who present it to the bank. Order cheque: It is also en cash able on the counter. But its holder must satisfied the banker that he/she is true holder and entitled to collect the payment of the cheque for this he/she has to prove his/her identity through an existing account holder of the bank. Crossed cheque:It is not en cash able on the counter. It can only be credited to the payees account. If there are two persons having accounts at the same bank and one of account holder issues cross cheque in favor of the other then the cheque will be credited

to the account of the per son to whom the cheque was issued at debited from the account of the person who had issued the cheque.

3.2.4 Credit Department


BankIslami offer different mode of financing accor ding to I slamic mode. There ar e main to types of Financing modes in bankislami Mudarabah and Musharakah. Other modes of financing are divided in to categories Short term financing and long term financing. 3.2.4.1 Musharakah Financing In Musharakah, a joint enterprise is formed for conducting some business in which all partners share the profit according to a mutually agreed pre-determined ratio, whereas, the loss is shared in the ratio of capital investment. From Shariah perspective, Musharakah is one of the preferr ed modes of financing. The scope of Musharakah is broad. Musharakah can be applied to fulf ill project financing needs as well as wor king capital financing needs of Corporate Clients. Since Musharakah transactions are based on pure profit and loss shar ing arrangement, therefore, the risks associated with such transactions ar e greater as compared to other financing modes. Due to this reason, Musharakah transactions are executed subject to satisfactory r eview of feasibility of the proposed transaction/project. 3.2.4.2 Mudarabah Financing Mudarabah is a kind of partnership where one partner gives money to another for investing in a commercial enterprise. The investment comes from the fir st partner who is called 'Rabb-ul-Maal' while the management of the business is an exclusive responsibility of the other , who is called 'Mudarib'. The profits generated are shared according to a mutually agreed pre-determined ratio, whereas, loss is borne by Rabb-ul-Maal unless the loss is due to negligence of Mudar ib. 3.2.4.3 Working Capital Finance (shot ter m financing) At BankIsami, we understand that your business needs constant access to low cost and flexible financing, in order to meet day-to- day funding needs. Our teams of experienced Relationship

Managers with wide sector exper ience offer you effective cash flow management by way of financing arrangements suitably structured to your needs and your risk profile. Cash is the lifeline of your business. Let your business have a blooming & prosper ous life with our Working capital finance facility. To fulfill your working-capital financing requirements, BankIslami offer s a wide range of products as follows: a) Murabahah Financing: Murabahah is a type of sale in which the seller discloses the cost of goods and profit to the buyer. Through this short-term financing mode, BankIslami can finance the asset purchase requirement' of the Corporate Customers. The Customer, intending to utilize the Murabahah facility, identif ies the commodities ('assets') it needs to purchase through Murabahah facility. BankIslami pur chases the assets from Supplier and then sells the same to the Cor porate Customer against an agreed price (including disclosed profit portion) on deferred payment basis. b) Istisna Financing: Istisna is a contract of sale of specified items to be manufactured/constructed, with an obligation on the part of the manufacturer/seller to deliver them to the buyer upon completion. Istisna can be used for made-to-order commodities where the buyer (BankIslami) would order a specif ic good with some specifications to be manufactured by the Corporate Client in a particular per iod of time and deliver to BankIslami after completion. c) Salam Financing: Salamis a sale, whereby, the seller undertakes to supply some specific commodity to the buyer at a future date in exchange for an advanced pr ice fully paid on the spot. As a matter of principle, the sale of a commodity which is not in the possession of the seller is unlawful. Thus, the practice of Salamis legalized as an exception and is allowed under certain term and condition. Salamis allowed for commodities only which are homogeneous and fungible in nature i.e. every unit of the commodity should be identical and substitutable in nature e.g. sugar, rice, wheat etc. Ther efore, Salam is an ideal mode for financing for agricultur al concerns. Salamfinancing can also fulf ill all working capital requirements of manufacturers/traders dealing in homogeneous commodities.

3.2.4.4 Proj ect Financing(medium and long term) BankIslami offers medium and long-term financing facilities for infrastr ucture, BMR and industr ial projects in all sectors directly or on syndication basis. a) Ijarah: Ijarahis a contract, whereby, BankI slami will lease out an asset to the Corporate Client and receive periodical rentals from the Client for the use of that asset. The asset will remain in the ownership of the Bank throughout the term of Ijarah.At the end of the Ijarahterm, the asset can be purchased by the Client at an agreed price. Ijarahis mainly used for long and medium term fixed asset financing for infrastructure, BMR and industrial projects. b) Diminishing Musharakah: The product of Diminishing Musharakah is offer ed on the basis of 'Shirkat-ul-Milk' . Shirkat-ulMilkmeans partnership of persons in an undivided property. Process of Diminishing Musharakahfinancing involves BankIslami taking share in the ownership of a specific asset along with the Cor porate Client and then gradual purchase of the Client of BankIslami's ownership share in the asset through out the term of Diminishing Musharakah.At the end of the Diminishing Musharakahterm, Client becomes the sole owner of the asset. Diminishing Musharakahis mainly used for long and medium term fixed asset financing for infrastructure, BMR and industrial projects. Diminishing Musharakahis also an ideal mode for Real Estate Financing.

3.2.5 Consumer banki ng


Same as other BankIslami offers Same ser vices as online banking, Transfer funds, Lookers facilities, ATM card facilities. 3.2.5.1 Online Banking BankIslami's has a wide networ k of 102 Branches in 49 Cities all of which provide Online Banking services. Online Banking means that all our 102 Branches in 49 Cities are connected with each other so that you can instantly access your account and make transactions in any

BankIslami Br anch. The following are the key benefits that you will get out of using our Online branch network: Cash Deposit for immediate credit to a remote branch. Remote Cheque Encashment fr om any Online branch. Instant Funds Transfer between any 2 Online branches. Balance Enquiry and Statement of Account from any Online branch 3.2.5.2 Inter Bank Transfer Fund Do you want to provide ease and convenience to your friends, family, colleagues and business associates. With our Interbank funds transfer (IBFT) facility you can easily transfer funds in their accounts via your ATM. Now, when dealing with you they can ensure hasslefree funds transfer in their accounts. No nuisance of waiting for Cheque clearance or going to the branch to deposit Cash or Cheque. IBFTfacility enables you to send and receive funds Online from and to any Account holder of 1Link I BFT participating member Banks. Following are the key benefits that you will get out of using our IBFT facility: 3.2.5.3 ATM or Debit Card is a Shariah compliant ATM/Debit card, all in one, which acts as a complete replacement for cash. Now you have the freedom to access your Bank account 24 hours a day to make instant and cashless payments at a multitude of shops, outlets and restaurants in addition to its use on our ATM network. ATM Card: You can withdraw cash anytime and anywhere from around 2,500 ATMs countrywide linked to both the M-Net and 1- Link switches. Debit Card: You can buy grocery, fill fuel, dine-out and make purchases at over 3,600 retail outlets linked to the Orix Network countr ywide. 3.2.5.4 Biometric ATM Enjoy secure and safe ATM transactions with BankIslami s Biometric ATM based on BankIslamis One Card, which pr ovides maximum security since it uses the most authentic way

to verify your identity. How? Apart from a pin- code, you can also use your finger or thumb impr ession for identification pur poses. After all, your fingerprints are yours and they cannot be copied. Amazing! Isn't it? Built with the state-of-the-art technology, these ATMs are the first of its kind in Pakistan. Insert your One Car d in the Biometric ATM machine Place your Right/Left thumb impression on the space provided at the right side of the machine. Select the type of account from which you want to withdraw funds Select the amount to withdr aw Take your Cash Take your Receipt 3.2.5.5 Lockers Let us make this world safer and secure for you and your family. Our Safe Deposit Locker facility enables you to store your valuables in strong heat r esistant steel lockers with 24 hour security. Be it jeweller y, passports, share certificates or title deeds, you can rest assured that your valuables are not prone to loss, fire or theft. You can also nominate/authorize your dear and loved ones to oper ate the Locker. Now you can live a carefree & stress free life while we take care of your valuables while retaining your privacy. Following are the key benifits that you will get out of using safe deposit locker facility Protection against weather conditions & power failures with smoke-sensor's, backed by fire fighting equipment and 24 hour manned security. A Locker custodian to offer friendly and personalized assistance. Maximum of four (4) deposit operators per Locker. Safety of your valuables from loss, fire and theft. Unlimited fr ee visits to your Locker.

Chapter #4 Analysis

4.1 Financial informa tion: The financial information of the BankIslami is summarized as under:
Table 4.1 Financial information FINANCIAL HIGLIGHTS Total Deposits Total Assets Total financing- net Total Investment Shareholder's Equity Branches Employees 2008 Rs.(Million) 12,478 19,089 6,528 5,020 5,192 102(units) 1,188(units) 36(units) 563(units) 2007 Rs.(Million) 9,934 14,447 3,963 3,864 3,845

Table 4.2 Profit &loss Account PROFIT/LOSS ACCOUNT Return Earned Profit Paid Net Spread Fee, Exchange income Core Banking income Provision Other income Operating Expenditure Profit/loss befor e tax Taxation Loss after tax

2008

2007

Rs.Million Rs.Million 1468.69 602.06 729.53 303.84 739.16 298.22 141.39 71.46 880.55 369.68 -130.56 -28.37 54.75 68.82 -1033.9 -510.59 -229.15 -100.46 176.22 63.44 -52.93 -37.02

Table 4.3 Financing made by bank FINANCINGS Financing in pakistan -Murabaha -Istin'a -Diminishing Mushraka-Housing -Diminishing Mushraka-other -Againt Bills-Murabaha -salam -Musawamah -Financing to employees Net investment in Ijarah financing Financing- gross Provision for non per forming financing -specific -General Financing- Net - 141687 - 18242 6527531 -20285 -9088 3962867 2363736 184797 682141 1457729 3576 3387 200664 4896030 1791430 6687460 581505 31886 179213 1576705 6158 105000 66362 112592 2659421 1332819 3992240 2008 Rs.'000 2007 Rs.'000

4.3 Analysis of the Report


4.3.1 Financial Statement Analysis Financial statement analysis are the principal means of r eporting the financial condition and result of operations of an organization, or in other words we can that financial analysis ar e carried out for the purpose of identifying the financial strengths and weaknesses of an organization by properly establishing relationships between the balance sheet and the income statement items. This analysis helps various parties in decision making who are interested in the activities of business. To improve the quality of decision making, proper analysis of these statements helps a lot. The firm itself and the outsider providers of capital, creditors and

investors all undertake financial statement analysis. The type of analysis varies according to the specif ic interests of the party involved. The financial data of BankIslami is analyzed in the following two ways: Common Size Analysis. Ratio Analysis.

Common Size analysis and ratio analysis are used to measure firms performance over time and while making comparisons with different balance sheet and income statement items. In the common size analysis we use the balance sheet and income statement and measure their perfor mance as compared to other years and in the same year, by generating a per centage increase or decline. 4.3.2 Common Size Analysis An analysis of percentage financial statements where total assets divide all balance sheet items and all income statement items are divided by net sales or revenues is called common size analysis. Common size analysis can give analyst valuable insight into changes that have occurred in a firms financial condition and performance. As common size analysis gives us relative percentage of an item with r espect to total, so the growth or decline in various items of balance sheet and income statement can not be detected from common size percentages. It further consists of Vertical Analysis Horizontal Analysis

a) Vertical analysis Vertical analysis compares each amount with a base amount selected fr om the same year. Simply, we compare the items of balance sheet or income statement vertically by taking one item as 100% b) Horizont al analysis

Horizontal analysis compares each amount with a base amount for a selected base year or we take each item of base year as 100% and compare with other items. The internee has limited her analysis to vertical analysis only.

Table 4.4 COMMON SIZE (VERTICAL) ANALYSIS OF BALANCE SHEET ASSETS Cash and Balance with treasury bank Balance with other banks Lending to Financial Institutions Investments Advances Operating fixed assets Deferred tax assets Other Assets Total Assets LIABILITIES Bills payments Bor rowings Deposits and other accounts Sub-Coordinated Lone Other liabilities Deferred tax liabilities Total liabilities SHAREHOLDERS EQUITY Share capital Reser ves ACCUMLATED LOSS Total equity Total liabilities and Total equity 22.15% -0.31% 21.83% 100.00% 27.66% -0.51% 27.14% 100.00% 0.58% 0.48% 68.76% 3.55% 73.39% 1.85% 1.28% 65.37% 4.29% 72.80% 2007 9.91% 17.80% 4.32% 26.77% 27.42% 7.56% 0.62% 5.54% 100% 2008 11.39% 11.56% 0.20% 26.29% 34.19% 10.00% 1.30% 4.93% 100%

4.3.2.1 Vertical Analysis of Balance Sheet Vertical analysis shows the proportionate percentage of different items of the balance sheet with respect to Total Assets. The vertical analysis of Bankislami shows that ther e are different proportions of different assets and liabilities over the time per iod. This is due to many reasons. First of all the assets have changed and increased over the time per iod. The change in assets affects the over all vertical analysis as the change is analyzed with r espect to assets. The major components in the balance sheet of banks are deposits, advances and investment, as the major expense and income occurred due to these respectively. So looking closely to these items advances increased from 2007 to 2008. On other hand the investment remains same in both years. Bankers are left with only option of investing in short-term investments, to increase their profit margin. I nvestments, as being a non- interest source of income are more promising than advances that are becoming less profitable due to declining interest r ates. Bankers prefer to give advances when the interest rate was high but then prefer to invest in non interest income in 2007 when the income from investment was higher than the interest rate. Now our discussion comes to deposits. Deposits also increase in year 2008. Now coming to other important items i.e. cash in hand and balance with other banks. These items show the liquidity of the organization and meeting short ter m liabilities. The cash in hand is incr easing fr om 2007 to 2008, but the balance with other bank is decreasing. Thus showing that now the bank is more liquid, and liquidity is inversely proportion to profit. The cash in hand should be invested in short term investments, so that the organization can earn profit on idle money. Now coming to the share holders equity, the equity has been increased from 22% to 27% of total asset over the time per iod. This shows that either people are interested to invest in the BankIslami, or reserves has increased or valuation of assets is the cause behind this increase.

Table 4.5 COMMON SIZE (VERTICAL) ANALYSIS OF INCOME STATEMENT Markup Revenue Markup Expense Gross Profit Provision for Advances Provision for Investments Bad debts wr itten off Net Mar kup Income NON-MARKUP INCOME Fee and Commission Dividend I ncome Exchange income Other income Total non-markup income Total Income NON-MARKUP EXPENSE Admin Expenses Other provisions Other charges Total non-markup expense lOSS Before Tax LOSS After Tax 4.3.2.2 Vertical Analysis of Income Statement The Vertical analysis of Income statement of BankIslami as given in the above table is showing a percentage change with respect to the sales or markup income. Ther e is a consistent decreasing trend in the banks gross profit. The main reason behind this is that the bank has not controlled its markup expenses in relation to total markup revenue. I n simple words we can say that this inclining trend in the markup expenses resulting in the decreased gross profits. This can be because of decreasing interest rate on advances or increasing interest rates on deposits to encourage savings. Markup expenses are actually cost of sale in case of a bank. Furthermore this decreasing trend in gr oss profit shows the inefficiency of the banks management in controlling 2007 100% 50.3% 49.5% 4.6% 4.6% 44.68% 10.13% 3.8% 1.66% 1.4% 27.88% 68.10% 84.21% 0.48% 84.71% -16.61% -6.14% 2008 100% 49.65% 50.34% 8.85% 8.85% 41.41% 7.6% 1.9% 2.1% 1.4% 41.88% 54.76% 70.02% 0.3% 70.36% -15.59% -3.54%

markup expenses. So this decreasing trend of gross profit is a negative or unhealthy sign and the banks management should consider it and take some actions to improve its position. Table 4.6 COMMON SIZE (HORIZANTAL) ANALYSIS OF INCOME STATEMENT 2006 Markup Revenue Markup Expense Gr oss Profit Provision for Advances Provision for Investments Bad debts written off Net Markup Income NON- MARKUP INCOME Fee and Commission Dividend Income Exchange income Other income Total non-markup income Total Income NON- MARKUP EXPENSE Admin Expenses Other provisions Other charges Total non-markup expense lOSS Before Tax LOSS After Tax 4.3.2.3 Horizontal Analysis of Income Statement Horizontal analysis of income statement shows three year in which year 2006 is as base year and value of year 2007 and 2008 will be calculated on the bases of year 2006. we see too much difference between the values that is because of big differ ence between the values in these years and bank are at the begging stage . 2007 2008

100% 502% 1369% 100% 1527.87% 3808.53% 100% 267.90% 812.35% 100% 2734.67% 12943.56% - - 100% 2734.37% 12942.56% 100% 235.87% 657.52% 100% 100% 100% 100% 100% 100% 100% - 100% 100% 100% 100% 1684.46% 70.61% 1284.86% 163.39% 214.91% 228.39% 248.56% - 75.74% 220.55% 192.05% 343.18% -58.85% 549.07% 566.16% 533.59% 3168.72% -87.17% 3855.81% 29.17% 345.45% 548.39% 606.56%

Table 4.7 COMMON SIZE (HORIZANTAL) ANALYSIS OF BALANCE SHEET ASSETS Cash and Balance with treasury bank Balance with other banks Lending to Financial Institutions Investments Advances Operating fixed assets DEFERRED TAX ASSETS OTHER ASSETS Total Assets LIABILITIES Bills payments Borrowings Deposits and other accounts SUB-ORDINATED LOAN Other liabilities Deferred tax liabilities Total liabilities SHAREHOLDERS EQUITY Share capital Reserves ACCUMLATED LOSS Total equity Total liabilities and Total equity 2006 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% - 100.00% - 100.00% 100.00% - 100.00% 100.00% 100.00% 103.55% 324.59% -40.00% 362.50% -42.41% -8.01% 976.77% -115.81% -70.04% 487.58% 63.95% 2007 223.96% 126.20% -49.70% 583.77% 213.14% 47.85% 133.33% -48.53% 159% 165.22% -60.00% 358.72% 284.62% 2008 143.49% 79.37% -190.29% 818.05% 580.60% 233.11% 781.48% -33.62% 274% 234.78% 290.00% 701.74%

4.3.2.4 Horizontal Analysis of Balance Sheet

Ther e are too much differ ence between these r atios are due to bank was in initial stages. It a 5 annual report of bankislami and values in year 2006 is too much low as compare to the year 2007 and 2008. That creates big differ ence in the values.

th

4.4 Financial Analysis

Ratio

Ratio means one number expr essed in terms of another . Ratio is a statistical yardstick by means of which relationship between two or more var ious figures can be compared and measur ed. The ratio analysis can be done under 4.4.1 PROFITABILITY RATIO Under this heading, two commonly used ratios are gross profit margin and net profit margin ratios. These are now discussed in detail. 4.4.1.1 Gross Profit Margin Gross Profit is the difference between revenues and cost of goods sold. Gross profit is critical because it represent the amount of money remaining to pay operating expenses, financing costs, and taxes and to pay for profit. Gross profit margin is the amount of each sale rupee left over after paying cost of goods or services sold. It is calculated as follows: Gross Profit Margin = Gross Profit / Sales x 100 For 2007 298218/602060*100= 49.53 % For 2008 739160 / 1468688* 100 = 50.32 % It is obvious from the values of Gross Profit Margin that the tr end is increasing in year 2008. The reason for this increasing in sales with respect to markup. Sales can be affected by number of reasons, the increase in interest rates due to inflation; competitor s have captured more market share or inefficient management. This increasing trend is good for any organization because the net profit will not affected much. 4.4.1.2 Net Profit Margin

The BankIslami measures the loss that is available from each rupee of sales after all expenses have been pad, including cost of sales, selling, general, and administrative expenses; depreciation; interest; and taxes. The ratio is calculated as follows: Net Profit Margin = Net Loss after Taxes / Sales x 100 For 2007 -37023/602060*100= -6.14% For 2008 -52930/ 1468688* 100 = -3.60%

4.4.1.3 Return on Assets The ROA ratio provides a standard for evaluating how efficiently financial management employs the average dollar invested in the firms assets, whether the dollar came from investors or creditors. Return on Asset s = Net Loss/ Total Assets x 100 For 2007 -37023/14447473*100=-0.025 % For 2008 -52930/ 19088600* 100 =-0.027 % The return on investment values of BankI slami shows negative sign. That means Bank is going into loss. When bank is going in loss how we get return on assets from that loss. 4.4.1.4 Return on Equity It is another measure of overall per formance of a company. Return on equity (ROE) shows the companys r esidual pr ofits as a proportion of the book value of common stockholder s equity. Return on Equity = Net Loss after Tax / Common Stockholders equity x 100 For 2007 -37023 / 3200000*100= -1.157% For 2008 -52930 /5279679 *100=-1.0025 % The ROE of BankIslami showing Bank ar e going in loss, so shareholder equity also bear loss from net loss. 4.4.1.5 Earning Per Share =Net Income/No. of Shares Out standing For 2007 For 2008 -37023 / 81954118 *100= -0.0452% -52930 / 116337654 *100= -0.0455%

4.4.1.6 Operating Cost to income ratio This ratio can be measured by dividing non interest cost with income earned dur ing that period of time. = Non-interest cost/ income For 2007 For 2008 140281/410127=0.342 196139/804743=0.2437

4.4.1.7 Debit to Equity Rat io The debt to equity (debt or financial lever age) ratio indicates the extent to which the business relies on debt financing. A high financial leverage or debt to equity ratio indicates possible difficulty in paying interest and principal while obtaining more funding. In debt equity ratio, the total debt is compar ed with the shareholders equity; the lower the ratio the better the companys solvency, the higher ratio is a r isk to a present or future creditor. Debt to Equity Ratio = Total Debt/ Owners equity For 2007 987904 /3200000 *100= 30.872% For 2008 6567882 /5279679 *100= 124.399% The debt to equity ratio has increased from 30.8% to 124.399%. The ratios are very high in both the cases but in the case of banks, the portion of debt is much higher than the equity as most of business of bank survives on external funds. But as we can see that the debt to equity ratio has increased this is not a good sign for any organization, but this increase is not due to increase in equity but due to decrease in debt. 4.4.1.8 Debit Ratio = total Liabilities /Total Assets For 2007 For 2008 3844726 / 14447473 *100= 26.61% 5191821 / 19088600 *100= 27.19%

The debt r atio measures the proportion of total assets financed by the company s credit. The higher this ratio the greater is the amount of other people money being used in an attempt to generate profits. So bank is using a great deal of people money to generate profits.

4.4.2 Efficiency Ratio


4.4.2.1 Interest income per employee This ratio shows how an employee ear ns from interest income. In this we divided Interest income with the number of employees with in the banks. In these calculation amount in million. For 2007 For 2008 6020.06/563=10.69 1468.69/1188=1.83

4.4.2.2 Profits per employee We can calculated profit per employee by dividing total profit with number of employees. But in case of bankislami in both year s bank are going in loss so the ratio is in negative. For 2007 For 2008 -100.46/563= -0.1784 -229.15/1188= -0.1928

4.4.2.3 Business per employee This ratio shows hoe much an employee can get business from market. It can be calculated by dividing total profit after taxation. But in case of bankislami it will in negative because bank is in loss. For 2007 For 2008 -37.02/563= -0.065 -52.93/1188= -0.0445

4.4.2.4 Business per branch In this ratio we can calculated hoe much a branch can get business from market or how much a branch share in profit, it will be an average. It can be calculated by dividing profit after taxation with the number of br anches that bank have. But in case of bankislami ratio will be in negative because bank is in loss in both year. For 2007 For 2008 -7.02/36= -0.02 -2.93/102= -0.518

4.4.2.5 Employees per branch Employee per branch shows hoe much an average of employees are there in the bank branches. It can be calculated by dividing number of employees with number of branches.

For 2007 For 2008

563/36 =15.63 1188/102=11.64

4.4.2.6 Total Advances to Total Deposit Ratio =Total Advances/ Total Deposits*100 For 2007 For 2008 the bank. 4.4.2.7 Total Advances to Total Assets =Total Advances/ Total Assets*100 For 2007 For 2008
3,963 / 14,447 *100= 27.43% 6,528 / 19,089 *100= 34.19% 3,963 / 9,934 *100= 39.89% 6,528 / 12,478 *100= 52.31%

This r atio tells us how much of the bank has advanced. This ratio is not ver y much favorable for

This ratio shows the advances which the bank makes as the percentage of its total assets. If the advances are increasing then the total assets then it is favorable for the bank. Because there ar e ore advances, there is more income of the bank and respectively more profit. showing decreasing trend. 4.4.2.8 Fixed Assets t o Total Assets =Fixed Assets /Total Assets*100 For 2007 For 2008 11093 / 14447 *100= 76.78% 1910 / 19088 *100= 100% This r atio is

In the bank fixed assts are comprised of equipment, furniture and buildings. These assets have great importance or the bank in order to maintain the working conditions up to the mark. This ratio is satisfactory for the bank. 4.5 SWOT Analysis In past the organizations were limited to their own performance and outputs, they only consider what they get and what they lose, with the emergence of management studies and globalization now the organization cannot sur vive until they competes with their surroundings and then

internationally. Wor ld has set some standards for organizations so each and every organization have to look what is happening around? Today s organizations are perplexed with the phenomena of intense competition. It has become imperative for them to be taking guard for their survival. So in search for excellence it is the cr itical self-appraisal which is attached so much importance. Even in mundane affairs of life, intr ospection is necessary even at the individual level. Every sagacious person examines his conduct critically in relation to his environment. And then pauses, looks, transform and conform to what is required. If he doesnt he is lacking sagacity and world tells him emphatically. When we come towards organization then it is the question of its ver y survival. It is a practice, which is indispensable for future growth. There are many techniques to analyze the or ganizations perfor mance i.e. input/ output analysis, pest analysis, SWOT analysis etc. SWOT analysis is kind of tool that is used to analyze an organizations performance in relation to its environment external or internal opportunities and threats. Strategy analysis and selection of the best alternative is of critical impor tance and prime responsibility for any organizations management. Management has to go through extensive internal and external analysis to determine their organizations per for mance in relation to their mission and objectives. The SWOT analysis of BankI slami is as follows. 4.5.1 Strengths Advantages of r eligious proposition in a country made on name of Islam i.e. Pakistan. Competitive advantage: Less marketing is required than conventional banking and better cost control as a result. Morale and commitment to serve is higher among bankers and staff due to religious value. Huge amount of savings can be mobilized and thus boosting the deposit base of banks using char ities and Zakatfund schemes, etc. Less use of money for speculative purposes thus chances of investment failure and much volatility in investment is reduced.

Innovative aspect is also found in it, using phone banking, e- banking, etc. a blend of tradition and moder n life can be easily ser ved to customers. Location wise & geographically, it is feasible and operational all across the country, as Pakistan is 98% Muslim population country scattered in all nooks of national territory. Quality of services will not less than conventional banking services so a competitor to established banking (interest based) in same market. 4.5.2 Weaknesses Lack of standardization across the Muftis /scholars of the country and among the scholars and bankers. Disadvantage of proposition is that there would be a hesitant and new thing not fully accepted / suited to World Bank, ADB, and other multinational donor agencies to invest through banking sector in country. A lot of capital is needed to boost it in front of conventional banking, and also huge reserves have to be maintained, to meet any loss shar ing situation in Islamic finance modes of investment. Time/season factor becomes a major problem in case of Islamic banks, as people would like to shift their money from zakatdeductible accounts or they wish to pay their problems for the banks. Ther e are differences in theory and practice of Islamic banking in Pakistan to some extent creating an inherent weakness. Management and staff need further training to serve Islamic financial ser vices and relevant experience as well to done their job eff iciently. Value chain management will become a major hurdle to Islamic Halal funds of I slamic zakat from Halal funds during Ramadan or on Eidfestivals, etc. creating short term liquidity

banks, as it will need Islamic money and call money markets, investment opportunities with pure halal businesses, Islamic equity market (instead of stock market), etc.

4.5.3 Opportunities More opportunities now lie in I slamic banking as it has been accepted by BASEL, WB, ADB, international agencies, multinational corporations, non Muslim governments, etc. with creation of big suku and Islamic deposit base in Gulf and Malaysian regions. k Tr aditional interest based banking will have to defend through heavy marketing and advertising in Muslim countries which off course reduce their profitability. Islamic banking is a complete solution to economic and to some extent social needs of Muslims from House building to education in addition to conventional help in commerce, business and industry. Modern Islamic banking emerged in late 20
th

century with more or less advent of internet

and information age, thus it is naturally blended with tools of inter net, and computer based banking, and will witness a sharper growth than tr aditional banking growth of last 500 year s. New mar kets have been emerged with gr owth of Islamic banking as well: Islamic mortgage, Islamic insur ance, new investment projects etc. In non-Muslim countries, like France where Muslim are in minority ( around 10%) of population, Islamic banking will enjoy the benefit of niche marketing and if properly targeted will obtain better results. 4.5.4 Threats A lot of legislation is required for Islamic banking world wide and especially in nonMuslim countries; even in Pakistan some legal loopholes are present in its proper implementation. Comprehensive Islamic economic and banking models have yet to develop or they are not in their maturity stage to provide a blueprint of economic development and prosperity. IT developments and Research in latest Banking are in non-Muslim countries where conventional interest based banking have a very strong position thus Islamic banking will enjoy latest tools of IT, but lesser than conventional banking.

Environment for Islamic banking in west has been declined after 9/11 attacks on WTC, New York and later Prophet Mohammad (P.B.U.H.) protests in Muslim wor ld, widening the gaps between the western investors and Islamic banking markets. Market demand is good but very less as compared to conventional interest based banking through out the world, i.e. beyond some countries. Sustainable financial backing by lar ge multinational firms, investment banks, and World major economic powers is lacking.

Chapter # 5 5.1 CONCLUSION


BankIslami Pakistan Limited is an Islamic bank in Pakistan. The mission of bankislami is to intr oduce I slamic banking in Pakistan and globally. They can wor ked under leadership of Dubai Islamic Bank and Janjuar Saddqui & co. an audited fir m in Pakistan.

This internship experience has been very much informative for me as it helped me in numerous ways like in learning new things and ideas about official environment and now I have the knowledge and experience of working in office environment I have realized my abilities and expertise of working in that kind of environment. Internship is a super vised pre-professional career related experience paid or unpaid, part or full time, with measurable learning objectives and for mal evaluation. And it is requirement for MBA degree.

The branch manager is usually given very little regarding sanction of advances and over draft whereas the responsibilities are numerous. The branch is newly opened in jhelum city, also bankislami is not to much old. I ts all about 5 to 6 year old bank. I can study and make analysis on year 2007 annual report of bankIslami. Its fifth annual report of that bank but till yet bank is going in loss. There may be a differ ent reasons behind that bank is newly be opened and they can offer Islamic mode of financing. The branch yet not stared financing, that problem same as differ ent cities with bankislami branches. The mobilization of deposits is mainly considered as the responsibility of the branch manager but the rest of the staff is usually least interested The bank has been applying he modern concepts of management and marketing at both micro levels. The interior and exteriors of the branch have been changed but the staff of the branch has been found less motivated towar ds the organizational objectives. The decision making is still centralized as the middle and low level management is not taken into confidence.

The promotional policy of the bank was obser ved as without any specific dir ection. Though the bank has defined its mission and vision but no specific plan has been designed so far. The bank staff has been found as less satisfied with bank policies and the recent retrenchment in the bank has created unrest and panic. Most of the employees working in this branch are not much familiar with computer. They just know how to use their part of software if any problem comes in the computer they cant fix it. The relationship between the employees of the branch is not that good because of which the whole environment of the branch becomes less favorable for work. Miss utilization of office utilities, especially the telephone. 5.2 RECOMMENDATION The branch manager should arrange a training program for its existing employees to help them perform their duties mor e effectively. The branch manage can start financing in there branch with there existence capital. Ther e should be a proper platfor m provided to its employees from where they can help the management in achieving its objectives. The branch should try to enter into the market of Islamic banking it would incr ease its competitive edge over the other branches in the secretariat. The bank should appoint customers relation off icer where the volume of work is too high. This will give an impression to client for personal Banking. This will help in improving the image of the bank and hence will attract more clients.

An Automated Teller Machine should be placed in the branch because during my internship I found many customers complaining for the ATM machine. The departments of this branch should be increased because its customers have to go to other branches of BankIslami in order to get the services which they need. BankIslami is not ver y well known bank in the market. Their market standing is not as strong as ther e competitors. For this BankIslami should opt for heavy advertisement both electronically and on print media to create public awareness. This product Business Power is suffer ing because of this reason as well. The bank must ensure the participation of the staff in all promotional activities of the bank to this end the bank must adhere to the policy of fr inge benefits rapid promotion of capable management and official. The old age benefit of the bank employee must be increased to motivate fee staff.

References
Book & Web References Islamic and finance bulletin (oct-Dec 2008) issue by Islamic banking department SBP. Islamic and finance bulletin (july-Sep. 2008) issue by Islamic banking department SBP. Muhammad Taqui Qusmani (Islamic Finance)

www.bankislami.com.pk www.islamicfinder.org www.dubaibank.ae www.albalagh.net/Islamic_economics/ http://www.islamicfinancenews.com/ www.sbp.org.pk http://www.sbp.org.pk/ibd/bulletin/Bulletin.asp