Corporate Banking

Services
 What is corporate Banking?
• Subset of business banking
• Covers a range of products and sevices offered
to corporate entities.
Business current Account
Investment services and project Financing
Working capital Financing
Wealth management financing
 What is corporate banking
• Corporate banking refers to the financial
services provided by banks to various
corporate customers for meeting their banking
and financial needs. Generally, the corporate
require banking facilities and accounts to carry
on their business.
 Types of customer
 COMPANIES
1. Private
2. Public
3. Government
 PARTNERSHIP FIRM
1. LLP
2. Registered firms
 REGISTERED TRUSTS
 REGISTERED SOCIETIES
 GOVERNMENT
1. Government department
2. Statutory bodies
RETAIL BANKING V/S CORPORATE BANKING

• RETAIL BANKING- Retail banking refers to the

division of a bank that deals directly with retail
customers. Also known as consumer banking
or personal banking
• CORPORATE BANKING- Corporate banking,
also known as business banking refers to the
aspect of banking that deals with corporate
customers
 Corporate Banking Products
• Financing- Provision of finance to corporate
entities, profit rate might be significantly high
due the amount of risk prevalent in the
transaction to the corporate customer.
• Islamic Corporate Banking Products:
 Murabaha
Murabaha

Sale at cost + profit

Concept Bank purchases goods from third party and sells them to the
customer, the cost and profit disclosed to the customer. Settlement
of murabaha price can be deferred (on monthly, quarterly, yearly
basis)

Applications Finance purchase of raw material supplies parts, fixed assets, etc.
Can be used to meet general liquidity requirements or finance
receivables
 Ijara
Ijara

Lease

Concepts Bank purchases an asset or service then leases it usufruct to the

customer for predetermined regular rent payments. May include
option of ownership transfer at lease end (only for Assets.)

Applications Leased or fixed asset (property plant, machinery, vehicles, etc.) or

sevices
 Istisna
Istisna

Order to manufacture

Concept Buyer request seller to manufacture or construct assets under certain

specifications, delivery deferred to a future data whereas price could
either be paid at spot or in the future

Applications Facilities purchase of goods and fixed assets.

Construction of property, plant, infrastructure projects.
 Tawreed
Tawreed

Sale of consumable

Concepts Buyer request seller to procure consumable/perishable goods with certain

specifications, delivery deferred to future date whereas price could either
be paid at spot or in the future

Application Facilities purchase of perishable and consumable goods (medicines, fruits,

s and vegetables etc.)
 Mudaraba
Mudaraba

Business partnership

Concept Partnership between investor (Rab-ul-maal) investment

manager (Mudarib) with pre-agreed profit ratio.

Applications Profit sharing savings/term investments accounts.

Facilities general financing requirements.
 Musharaka
Musharaka

Equity partnership

Concepts One party’s funding is invested along with another party’s fund
with pre-agreed profit distributions, while loss is borne
proportionally based on capital contributions

Applications Facilities general business requirements such as acquisition of

fixed asset etc.
 Wakala and Kafala
Agency (wakala)

Concepts One party acts as an agent on behalf of other

Guarantee (kafala) bank acts as a guarantor for the beneficiary
on behalf of the client

Applications Financing products L.Cs, payments, collections, other banking

services.
Kafala; Guarantee LCs