The thrust for Islamic Banking is founded on the desire to submit to the Divine Instructions on all transactions, particularly those involving exchange of money for money. However, it would be quite unfair to limit Islamic Banking to elimination of Riba only. Riba is but one of the major undesirable elements of an economic transaction, the others being Gharar (uncertainty) and Qimar (speculation). While elimination of these objectionable aspects in a transaction is indeed a critical aim of Islamic banking system, it is by no means its ultimate objective. At the heart of Islamic Banking is a system of commercial transactions that not only provides Halal modes of commercial transactions by avoiding that which is obnoxious and objectionable, but also fosters ethical, fair and just practices. A key element of Islamic economics is distribution of equitable rewards to the different factors of production. Islamic economic system seeks system of Redistributive justice where concentration of wealth in a few hands is countered and flow of money into economy is fluent. Islamic Banking is, therefore, seen as a lynchpin to achieving the economic and social goals of the Islamic economic system.

It has been argued in vain for long in some circles that the prohibition in Islam is that of excessive interest only. Or that it is the interest on consumptive loans that has been forbidden and as such loans extended for commercial purposes are entitled to an excess over the principal amount lent. Such tendentious arguing fails to give due understanding to verses 278 and 279 of Surah Al-Baqarah (quoted below). “O ye who believe! Be afraid of Allah and give up what remains (due to you) from Riba (usury) (from now onwards) if you are (really) believers! 2:278 And if you do not do it, take notice of war from Allah and His Messenger! But if you repent, you shall have your capital sums 2:279 However, this does not mean that Islam prohibits any gain on principal sums. In Islam, profit is the recognised reward for capital. When capital employed in permissible

business yields profit that “excess over capital” becomes the rightful and just claim of the owner of the capital. As a corollary, the risk of loss also rests exclusively with the capital and no other factor of production is expected to incur it. Another important element of Islamic finance is that profit or reward can only be claimed in the instance where either risk of loss has been assumed or effort has been expended. Profit is therefore received by the provider of capital and wages/remuneration by labour/manager. A depositor in an Islamic bank can therefore make earnings on his or her deposit in several ways. Through return on his capital when that capital is employed in a business venture; through sharing of profit when his capital is part of the capital that is employed in a partnership, and finally through rental earnings on an asset that has been partially financed by his capital.

Islamic financing: Asset-based financing
A key feature of Islamic banking is that unlike conventional banks which deal primarily in money and financial securities, Islamic financing is related to an asset that is a feature of the transaction, and quite often the principal feature itself. From this springs an important distinguishing feature of Islam wherein Islamic financing is always based on illiquid assets that have intrinsic value. Profit to Islamic financing is generated through bonafide sale of these assets. Conventional banking, on the other hand, is free of such limitations. It lends money and makes its earnings through this act of lending. Its earnings are unconcerned with the economic fate of its lending.

A Perspective
The history of Islamic banking from its recorded inception is less than 40 years old. From a humble beginning in a small village in Egypt in the late 60’s, it has spread to the four corners of the world. By normal standards in a time span that is less than half a century it could have hardly been expected to establish foothold in Muslim world, let alone make its presence felt in Muslim-minority countries. Yet such has been its phenomenal rate of growth that not only is it taking firm roots in its homestead, but is also attracting genuine interest among the standard bearers of conventional banking and in swathes of land where Muslims are a small minority only. Still there is much ground left to cover. In Pakistan, Islamic Banking is less than 3% of the Banking sector. Even in the Gulf states, where it has a larger footprint, in no single country is the volume of Islamic banking more than a third of the entire sector. Many blame Islamic Banking’s small share against conventional banking to a smaller portfolio of products. A standard complaint against Islamic banks is that they do not have the same variety of financial instruments as found in conventional banking. Though valid to an extent, this popular jeremiad needs to be seen in the perspective of Islamic Banking’s brief history against more than two centuries of conventional banking adopted

The profits are shared in a preagreed ratio. Assets in the venture are jointly owned in proportion to each partner’s contribution. The selling price once agreed cannot be changed even when the client fails to pay on the agreed date. In the following space. PRINCIPLEAOS ISLAMIC INSTRUMENTS Musharakah Musharakah is one of the two ideal modes of Islamic financing. Musharakah is a contractual relationship formed through mutual consent of the parties for sharing of profits and losses in a joint venture. The client pays periodic rent to the bank for the use . principal Islamic instruments are briefly described to acquaint the reader with their fundamental aspects. Islamic Bank representing share of its depositors invests funds in the joint venture alongside other investor(s). the Islamic bank is obligated to inform the client of the exact cost incurred in the purchase of the asset and the margin of profit incorporated in the sale price. its repertoire of Islamic financial products is steadily increasing. under Mudarabah partnership is formed between provider of capital and provider of expertise or human resource. Following that. Mudarabah is also a form of partnership. Losses. property. Mudarabah Like Musharakah. however. The bank transfers the right of use of the asset to the client. its competition against an entrenched system of banking and the constraints within which it must operate. while retaining the ownership of the asset. Payment by the client of the sale price may be deferred in which case it would become Muajjal. Losses are incurred solely by the partner contributing capital. Murabaha Murabaha is a non-participatory mode of Islamic financing where the bank sells the asset required by its client to the client on cost-plus basis. Ijara Under this facility a client may take on full force across the globe. Islamic banking is still growing at more than twice the growth rate of conventional banking worldwide. Whereas all partners in Musharakah contribute capital. The asset is first purchased by the bank and the bank incurs the risk of any loss or damage to the asset as long as the asset remains under its ownership. and while it may not have the latter’s plethora of financial products. are incurred in proportion to each partner’s investment. Islamic Products in BAL-IBD’s portfolio are illustrated in terms of their features. Notwithstanding. vehicle or any other real asset belonging to the bank. The other one being Mudarabah. Upon sale of the asset. Proportions for sharing profit are decided upfront.

000/= Tiered structure. . Pound Sterling and Euro. 6 monthly pay-out Applicable Musharakah Term deposit PKR 50. Any change is rental may be made through mutual consent.of the asset. Savings and Term Deposit facilities to its customers seeking personal banking relationships with the following features: Facility Current deposit Minimum balance PKR 10. Istisna Manufacture of a specific product against precise specifications by a manufacturer for delivery to buyer. Basis for rentals can be fixed as well as floating. and that the material required for manufacture is arranged by the manufacturer.000/= Profit‡ Nil Zakat deductions Not applicable Musharakah Savings deposit PKR 5. Foreign remittances are available in the following currencies: US dollars. The Seller receives in advance fully paid price of the goods at the time of contract undertaking to deliver the goods specified by the buyer at a future date. Salam Salam is a contract of advanced payment against deferred delivery of goods. It is necessary that the price of the product and product specifications are fully agreed upon by the manufacturer and the buyer. PERSONAL BANKNG Personal Accounts Bank Alfalah – Islamic Banking Division (BAL-IBD) offers Current. Goods paid for in advance by the buyer are delivered by the seller after an interval of time.000/= Tiered structure. 6 monthly pay-out Applicable ‡ All profits subject to 10% withholding tax On-line cash deposit facility at all branches of Bank Alfalah On-line transfer facility between all branches of BAL-IBD Remittances Foreign and local remittances are both available.

Shipping Guarantees and Advance payments against imports.g.Locker services Locker services are offered at select branches. Annual charges for the lockers are as follows: Small Medium Large Rs 1.250.000/Rs 2. • Exports o Export Murabaha Finance o SBP Islamic Export Finance Scheme .000/- Lockers are available to account holders and carry an insurance value of Rs.000/Rs 3. Lockers are available in three sizes – small.000/- CORPORATE BANKING Murabaha Finance • Types of Murabaha o Local purchases: For purchase of locally available goods o Imported goods/commodities/assets • Mode of repayment: o Immediately in cash o o o On a mutually agreed future date Spot Murabaha (Import) Deferred Sale Murabaha Trade Finance • Imports o Letter of Credits o o Import Murabaha Finance Full range of services related to imports e. Import bills for collection. Contract registration. medium and large.

financial and payment guarantees. Collection of export bills. BAL-IBD also issues guarantees securing financing facilities to be availed from Islamic Banks and/or Conventional Banks’ under Islamic modes of financing. restore and enhance your already owned housing unit (Alfalah Renovation) Transfer your existing exposure of housing finance facility from another financial institution to our Riba-free facility • You have the option to choose tenures for the purchase of units from between 3 to 20 years* * 3 to 7 years in case of renovation. giving you pure Islamic solutions for your desired objectives.o Other export related services e. The Alfalah Musharaka Homes product can be used in multiple situations. usually up to 80% of the property value. Through monthly payments – a composite of rent for use of property and purchase of BAL-IBDs’ Musharaka shares/units in the property – to BAL-IBD you will be able to increase your stake in the property every month. Negotiation under Sight LCs. you can participate with Bank Alfalah-Islamic Banking Division (BAL-IBD) in joint ownership of property where BAL-IBD invests a certain amount. • • • Purchase an already constructed house (Alfalah Buyer) Purchase a plot and subsequently construct upon it (Alfalah Builder) Renovate. Following purchase of all Musharaka units initially owned by BAL-IBD you shall become the sole owner of the house with a free Title to the property.g. Advising/Confirmation/Transfer of Letter of Credits opened by other banks Bank Guarantees A host of Guarantee types are offered by BAL-IBD including performance. CONSUMER BANKING Alfalah Musharaka Homes With Alfalah Musharaka homes. The rental component will be readjusted every month to reflect your growing share of ownership in the property. . extend.

Alfalah HilalCard can be utilized for all your financial needs around the world. Alfalah Hilal Card The International VISA Debit Card Carry your bank account in your wallet with Alfalah HilalCard Bank Alfalah Islamic Banking Division (IBD) offers Alfalah HilalCard to its customers for a conscious free spending in a modernized form of currency that provides you with a wide range of accessibility using VISA’s worldwide network. The Alfalah HilalCard . wherever VISA cards are accepted locally and Internationally. Used cars not older than three years can also be considered. giving you a more secure and convenient mode of payment. round the clock.Alfalah Car Ijarah A Shariah compliant car-leasing scheme with added features such as: • • • No upfront registration charges No upfront insurance premium No rentals before delivery of car The facility applies to all locally-assembled new cars up to Rs 4 million.

INTRODUCTION . PAY NOW OPTION. The reasons that make Alfalah HilalCard different from others • • • • • HILAL CARD IS A BUY NOW. How Can I apply? All you need to do is open a current/savings (musharaka) account in any branch of Bank Alfalah Limited and apply for your Alfalah HilalCard.The Alfalah HilalCard is an International VISA Debit card which gives you an unlimited access to your current/savings (musharka) account with a simple swipe. 4 No monthly repayment 4 No interest charges 4 Backed by a customer maintained current/savings (musharaka) account 4 Your limit is your balance HilalCard can be used electronically at any retail outlet or ATM that accepts any VISA cards. at more than 1 million ATMs and 27 million outlets around the world.

International operations were expanded to include the USA. It encompasses product offerings and services in Retail Banking and. On June 13. against an investment of PKR 22. 2004. HBL is the first Pakistani bank to raise Tier II Capital from external sources. Belgium. management control was handed over to AKFED. UAE. With a domestic market share of over 40%. in recent years. South and Central Asia. Seychelles and Maldives and the Netherlands. HBL is expanding its presence in principal international markets including the UK.409 billion (USD 389 million). HBL has the largest Corporate Banking portfolio in the country with an active Investment Banking arm.HBL established operations in Pakistan in 1947 and moved its head office to Karachi. Our first international branch was established in Colombo. The Board of Directors was reconstituted to have four AKFED nominees. MISSION & OBJECTIVES . traders and farmers. Sri Lanka in 1951 and Habib Bank Plaza was built in 1972 to commemorate the bank’s 25th Anniversary. 2002 Pakistan's Privatization Commission announced that the Government of Pakistan had formally granted the Aga Khan Fund for Economic Development (AKFED) rights to 51% of the shareholding in HBL. HBL was nationalized in 1974 and it continued to dominate the commercial banking sector with a major market share in inward foreign remittances (55%) and loans to small industries. On February 26. Consumer Banking as well. Africa and the Far East. RATING HBL is currently rated AA (Long Term) and A-1+ (Short term). Oman. including the Chairman and the President/CEO and three Government of Pakistan nominees. Singapore.

V I S S I O N s “Enabling people to advance with confidence and success”. Our values are defined below: EXCELLENCE . M “To make our customers prosper. our staff excel and create value for shareholders” VALUES Our values are the fundamental principles that define our culture and are brought to life in our attitudes and behavior. It is our values that make us unique and unmistakable. This is summarized in our vision. mission and is supported by our values.O Our brand identity is the outward expression of what we stand for as an organization.

innovative new products and processes.This is at the core of everything we do.expect us to possess and steadfastly adhere to high moral principles and professional standards. and a spirit of enterprise. Our customers . PROGRESSIVENESS We believe in the advancement of society through the adoption of enlightened working practices. giving our customers an abundance of choice. MERITOCRACY We believe in giving opportunities and advantages to our employees on the basis of their ability. We believe in rewarding achievement and in providing first-class career opportunities for all.and society in general . Only through being the very best . our products and premises .in terms of the service we offer.can we hope to be successful and grow. We always strive to put the satisfaction of our customers first. INTEGRITY We are the leading bank in Pakistan and our success depends upon trust. INDIVIDUAL CUSTOMERS . The markets in which we operate are becoming increasingly competitive. CUSTOMER FOCUS We understand fully the needs of our customers and adapt our products and services to meet these.

Whether establishing a new venture or expanding an existing business. our team understands your banking needs and works closely with you to realize your goals. offering products that are as diverse as the people we service. Saving Accounts: HBL’s Saving Accounts cater to individual saving habits. HBL provides the following products and services to meet its individual customer requirements: IINDIVIDUAL CUSTOMERS      Debit Card Deposit Accounts PhoneBanking BancAssurance Mutual Funds DEPOSIT ACCOUNTS HBL offers a wide range of accounts suited to meet individual customer needs.000. We remain resolute in our commitment to provide products that are competitive and services that are exemplary. Current Accounts: Our Current Accounts offer features that meet your daily banking needs. 10. Foreign Currency Accounts: .HBL caters to all market segments. They are: Term Accounts: Offered in a variety of tenors with deposits as low as Rs.

You don’t have to carry cash and your monthly statement provides you with a complete record of all your transactions so you can manage your expenses with ease. It has the following prominent features:  No Interest  Ease & Security  No Liability . Amaan . Tabeer – Children Education: An insurance plan that enables parents to cover education and marriage costs.Offered in multiple currencies with interest paid on a quarterly basis. BANCASSURANCE HBL and New Jubilee Life Insurance Company Limited (NJLI) introduce Amaan (Retirement Plan) and Tabeer (Child Education & Marriage). DEBIT CARD HBL Visa Debit Card allows you to pay for your purchases directly from your bank account.Retirement Plan: A pension plan that offers attractive investment returns. These products have been designed keeping HBL’s customer base as the focus and will provide life insurance along with an investment option.

You can now call HBL PhoneBanking and save a trip to the branch. HBL has a long history of being a partner of growth for business and industry. The Investment Banking Group is a market leader. For customers with an annual turnover between PKR 50 million to PKR 300 million. automotive. pharmaceuticals. leather. They are as follows: BUSINESS CUSTOMERS . the business banking group is segregated by the size of the customer. To do this. fertilizer.     International Recognition& Acceptability Spending Limits Free Account Statement 24 hour Customer Service Global Customer Assistance Service PHONE BANKING Your bank is just a phone call away. oil and gas and FMCGs. It provides innovative capital strategy solutions to major local and multinational entities. being an active player in a multitude of sectors including textiles. our Commercial Banking group provides a wide range of products that meet specific customer needs. aviation. sugar. telecom. petrochemicals. The Corporate Banking Group focuses on personalized services to large corporate borrowers who need tailored facilities. We cater to the needs of a broad spectrum of clients. Your query will be resolved in a single telephone call from anywhere and at anytime. We provide tailored banking solutions to business customers of all sizes in a wide range of industries. HBL offers a wide range of products and services for its business customers. The Corporate Bank manages a diverse portfolio. power.

• Pre and Post Shipment Export Financing (PKR and USD based) • Import Financing (PKR and USD based) . A long history of financing and nurturing relationships in Pakistan has given HBL a unique insight. etc. enabling us to provide timely and effective financial solutions for our customers to meet the growing challenges of a global economy. with a turnover of at least PKR 300 million. If you are a corporate customer. FE Loans. including Overdraft. • S e r v i c e s v i c e s We provide the following services to meet your funding requirements: • Working Capital Finance. Whether establishing a new venture or expanding an existing business.      Commercial Banking Corporate Banking Islamic Banking Investment Banking Cash Management Asset Management CORPORATE BANKING HBL Corporate Banking Group comprises a seasoned team of Relationship Managers (RMs) to meet the demanding service standards of large corporations. our team understands your banking needs and works closely with you to realize your goals. Our RMs have the expertise you need to create tailored financial solutions catering to the specific requirements of your business. we have a range of solutions designed to help you with your banking needs.

our Commercial Banking group provides a wide range of products that meet specific customer needs. Karachi Stock Exchange. responsive and experienced Relationship Managers who are committed to understanding your business. To do this.• • • • • LMM Funding Receivable Discounting Islamic Banking facilities Cash Management Services Trade Services including Letter of Credit. the business banking group is segregated by the size of the customer. We cater to the needs of a broad spectrum of clients. Rawalpindi Corporate Center. We have the ability and the resources to meet the needs of your business with our proactive. Letter of Guarantee and Standby Letter of Credit. Karachi Steel Mills. Lahore Corporate Center. Centres C Corporate Center. Multan COMMERCIAL BANIKNG HBL’s Commercial Banking Group targets medium sized companies with a turnover of at least PKR 50 million. Gujranwala and Peshawar. Karachi Stock Exchange. Karachi Export Processing Zone. Lahore. Islamabad Morga Branch. For customers with an annual turnover between PKR 50 million to PKR 300 million. Faisalabad Corporate Center. Karachi PIA Branch. Sialkot. Karachi Karachi Port Trust. Faisalabad. Each unit is dedicated to service business clusters located within these cities. Services We offer financing for the following: • Working Capital • Procurement of Inventory • Receivables . etc. Our business units are located in Karachi.

Sialkot Gujranwala Trust Plaza Peshawar Super Market INVESTMENT BANKING HBL offers full-service Investment Banking capabilities to its clientele. This is a testament to the out-of-box thinking and the innovative products we bring to our customers. Debt Capital Markets & Syndications and Equity Capital Markets & Advisory. HBL has closed over thirty transactions with a cumulative worth of over USD 2 billion. This year alone.I. Karachi S. Karachi Korangi Industrial Area. Karachi Saddar. Faisalabad Peoples Colony.E. Lahore Kashmir Road.T. Sialkot Paris Road. Sialkot Small Ind. Karachi Circular Road.. Karachi Napier Road. Faisalabad Panorama.• • • • • Procurement of Machinery Expansion of production facilities Import of raw materials Exports Guarantees Centres C Al-Noor. Karachi Tariq Road. The Investment Banking Group functions in three specialist business areas:    Project Finance. Lahore Peco Road. Karachi Foreign Exchange. Lahore Badami Bagh. Estate. ISLAMIC BANKING .

Murabaha (local & import) facilities are provided to meet the short-term financial needs of mid-market and corporate customers. At HBL. HBL’s Islamic Banking products are fully Shariah compliant and duly certified by independent Shariah Advisors. plants and machinery to meet long-term customer resource requirements. Semi-Finished/Finished goods or Store or Spares through Murabaha  Foreign/Inland Remittances  Utility Bills Collection  E-banking/Internet Banking services CASH MANAGEMENT HBL offers a comprehensive platform for customers to avail Cash Management Services throughout Pakistan.Islamic Banking is a growing market segment that offers attractive opportunities to potential and existing customers. thereby making it cost efficient. Advantages * Centralized Collections / Funds Transfer * Centralized Payments / Disbursements * Customized MIS Reporting * Centralized Customer Support through I IT/Operations . Our Cash Management Services reduce the cash turn around of your company. Islamic Banking provides Ijarah (leasing) for vehicles. Islamic Banking offers Shariah compliant products and services to meet the short and long term requirements of business and trade. Services Visit our Islamic Banking branch for the following services:  Opening of Current Account and Basic Banking Account (BBA)  Collection of Foreign/Inland Bills  Acquisition of Assets on Ijarah  Purchase of Raw Materials.

HBL’s presence in all agriculture belts of the country ensures easy access to farmers in rural areas. HBL enables farmers to buy good quality seeds. We provide loans to small-scale land owning farmers as well as large institutionalized and alliance based financing to boost the country's economy and yield better harvests. The following products ensure that customer needs are fully met with respect to their farming requirements: . pesticides. fertilizers.Products and Services Collections * Easy Collect * Standing Instruction via Debit Authority (SIDA) * Outward Bills for Collection (OBC) Payments * Salaries / Expenses * Online Cheque Payments (Vendor Payments) * Utility Bill Payments eBanking/InternetBanking * Electronic MIS reporting through email * Viewing of account statement through E-Banking service * Dedicated Customer Support Officers for Query Handling and Reconciliation RURAL FINANCE HBL’s Agriculture loans are spread across the country and provide financing through over 800 branches. agricultural implements and non-farm setups through its various product programs. We have the largest private bank portfolio in the country with over PKR 18 billion in various agriculture sectors.

2006. was incorporated on 17 February.A Wholly own subsidiary of Habib Bank Ltd.       Revolving Agri Scheme Haryali Farm Transport Scheme Agri Development Loan Agri Development Loan (Fish Farming) Agri Development Loan (Drip Irrigation) Agri Production Finance Haryali Livestock Loans ASSET MANAGEMENT HBL Asset Management Limited . . 2006 as a public limited company under the Companies Ordinance 1984 and was licensed for Investment Advisory and Asset Management Services by Securities and Exchange Commission of Pakistan on 3rd April.

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