Syed Danyal Shah

BBA
Group E
Semester 5
Submitted To: Sir Karim ullah
 Summary
In 2002, the state bank of Pakistan introduced Islamic banking in the country. They introduced
different models to raise funds and financing services. The Murabaha has been mostly used from
these models. Murabaha is the agreement where the buyer and seller agree on a specific markup
on the materials.
The relationship manager of the bank visited a construction company and discussed about
different Shariah compliant for financing facility where thy also discussed about the Musharaka
and Murabaha. They decided to go with the Murabaha model.
The relationship manager and the area manager of the bank visited the construction
company and checked the material they will be going to finance. After that they contacted the
suppliers and the chamber of commerce for the materials. The case was then reviewed by branch
manager and area manager.
The area manager studied the credit information of the company from where he get to
know that the company is financially weak because of some delayed payments in the past. The
relationship manager and finance manager answered the area manager that the strength of the
company can be evaluated by the agreements and the projects they have and these delayed
payments were because of the financial crises in the whole economy.
Another problem was that the mortgaged property was of the director’s father and the
bank believe that this will make the case weaker but then the father of director took guarantee.
The strong family bonds play an important role in the evaluation and development of financial
feasibilities. And then they have done some amendment in the supply chain of goods which were
approved by the PDSC.
The bank and the company agreed with the master Murabaha finance agreement with the
marked up price and the bank agreed with the agency agreement and the company can purchase
the supplies from the suppliers from the agree list on behalf of bank. The Takaful act as an
alternative to the insurance.
The purchase company made a demand draft and sent it to the supplier after being
accepted by the operation manager and the release of amount. But due to the shortage of time,
the supply of oil delayed. The purchase manager requested the company for amendment in the
Murabaha process flow design for the supply duration which has been then changed. The supply
was then succeeded and the payment was made by the bank. The bank then sold it to the
company at a marked up price.