IBP Superior Qualification

Summer 2020
The Institute of Bankers Pakistan

Time Allowed: 3 Hours Maximum Marks:100

Islamic Finance
Date: October 15, 2020 JAIBP (Specialization) Roll No:

Instructions:
i. Attempt ALL questions;
ii. Answers must be neat, relevant and brief;
iii. In marking the question paper, the examiners take into account clarity of exposition, logic of
arguments, presentation and language;
iv. Read the instructions printed inside the top cover of answer script CAREFULLY before attempting
the paper;
v. DO NOT write your Name, Access No or Roll no. etc. anywhere inside the answer script(s);
vi. Candidates are advised not to mark any of the objective answer on the question paper, otherwise
their paper will be cancelled;
vii. Question Paper must be returned to invigilator before leaving the examination hall.

SECTION B: SUBJECTIVE

All the questions from Section B are compulsory. (55 Marks)

Q1. World Surgical Pvt. Ltd. is the exporter of surgical mask and hand sanitizer products. Due to recent
COVID-19 pandemic, they are facing liquidity issues and uncertain about their proceeds from foreign
and local buyers’. To complete orders in hand, raw material financing is required.
Based on details provided above, suggest with reasons which of the following variant of Murabaha
should be adopted by World Surgical Pvt. Ltd. (08 Marks)
Spot Murabaha
OR
Advance Payment Murabaha
Q2.
A. Briefly discuss Islamic factors of production. (06 Marks)
B. The Asset side of Islamic Bank reflects different products, which are mainly based on three modes
of financing. Briefly discuss these three modes of financing along with examples. (06 Marks)
Q3. Discuss the elements of a Valid Sale. (06 Marks)
Q4. Leather Art is the manufacturer of Leather Jackets. To expand its production capacity Leather Art
wants to buy a tanning machine from local supplier, with the following elements: (10 Marks)
 The cost of the machine is PKR 20 million
 Leather Art wants to avail financing facility for 75 % of total cost of the machine
 Tenor of financing is 5 years
As a Relationship Manager of an Islamic Bank, suggest most suitable mode of finance to fulfill client’s
requirement and proposed arrangements (agreement terms) from disbursement till settlement.
Q5. Al-Khair Islamic Bank is facing liquidity crunch. As Chief Treasurer, suggest TWO alternatives
available to generate short-term liquidity. State step-by-step process from initiation of deal till closure
for both alternatives. (10 Marks)

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 IBP Superior Qualification
Summer 2020
The Institute of Bankers Pakistan
Q6. Define Riba and briefly discuss its types. (05 Marks)
Q7. Discuss any FOUR key challenges faced by the Islamic Banking Industry since its inception till date.
(04 Marks)

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