mon & bank ksc

8/14/2019 Mon & Bank KSC

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Money andBanking


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The Karachi Stock

Exchange

Empowering TheCompanies of Tomorrow


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Group Members ;

Syed Owais Ali (SP07-BB-0135)M. Moez Siddiqui (SP07-BB-0106)

M. Laraib (SP07-BB-0082)

Pawan Kumar (SP07-BB-0128)

Shahbaz Nawaz (Sp07-BB-0150)

Bhawani Shankar (SP07-BB-0039)


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What is Islamic Banking?

Islamic banking has been defined as banking inconsonance with the ethos and value system ofIslam and governed, in addition to the conventionalgood governance and risk management rules, bythe principles laid down by Islamic Shariah.

Interest free banking is a narrow concept denoting anumber of banking instruments or operations,which avoid interest.


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History

Steps for Islamization of banking and financialsystem of Pakistan were started in 1977-78.

Pakistan was among the three countries in theworld that had been trying to implement interest

free banking at comprehensive/national level.The Islamization measures included the elimination

of interest from the operations of specializedfinancial institutions including HBFC, ICP and NIT

in July 1979 and that of the commercial banksduring January 1981 to June 1985.


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The legal framework of Pakistan's financial andcorporate system was amended on June 26, 1980to permit issuance of a Shariah compliantinstrument of corporate financing namedParticipation Term Certificate (PTC).

Separate Interest-free counters started operating inall the nationalized commercial banks on January1, 1981 to mobilize deposits on profit and loss

sharing basis.


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Major modes ofIslamic Banking and

Finance


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MURABAHALiterally it means a sale on mutually agreed profit.

Technically, it is a contract of sale in which the sellerdeclares his cost and profit.

IJARAHIjarah is a contract of a known and proposed usufruct

against a specified and lawful return or consideration forthe service or return for the benefit proposed to be taken,or for the effort or work proposed to be expended.


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IJARAH-WAL-IQTINA A CONTRACT UNDER WHICH AN ISLAMIC BANK PROVIDES

EQUIPMENT, BUILDING OR OTHER ASSETS TO THECLIENT AGAINST AN AGREED RENTAL TOGETHER WITH AUNILATERAL UNDERTAKING BY THE BANK OR THE CLIENT

THAT AT THE END OF THE LEASE PERIOD, THEOWNERSHIP IN THE ASSET WOULD BE TRANSFERRED TO

THE LESSEE.

MUSAWAMAH

MUSAWAMAH IS A GENERAL AND REGULAR KIND OF SALE INWHICH PRICE OF THE COMMODITY TO BE TRADED ISBARGAINED BETWEEN SELLER AND THE BUYER WITHOUTANY REFERENCE TO THE PRICE PAID OR COST INCURREDBY THE FORMER.


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ISTISNA A

IT IS A CONTRACTUAL AGREEMENT FOR MANUFACTURINGGOODS AND COMMODITIES, ALLOWING CASH PAYMENTIN ADVANCE AND FUTURE DELIVERY OR A FUTURE

PAYMENT AND FUTURE DELIVERY.BAI MUAJJAL

LITERALLY IT MEANS A CREDIT SALE. TECHNICALLY, IT IS AFINANCING TECHNIQUE ADOPTED BY ISLAMIC BANKS

THAT TAKES THE FORM OF MURABAHA MUAJJAL.

MUDARABAH

A FORM OF PARTNERSHIP WHERE ONE PARTY PROVIDES THEFUNDS WHILE THE OTHER PROVIDES EXPERTISE ANDMANAGEMENT. THE LATTER IS REFERRED TO AS THE

MUDARIB


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MUSHARAKAH

MUSHARAKAH MEANS A RELATIONSHIP ESTABLISHED UNDERA CONTRACT BY THE MUTUAL CONSENT OF THE PARTIESFOR SHARING OF PROFITS AND LOSSES IN THE JOINT

BUSINESS.BAI SALAM

SALAM MEANS A CONTRACT IN WHICH ADVANCE PAYMENT ISMADE FOR GOODS TO BE DELIVERED LATER ON. THESELLER UNDERTAKES TO SUPPLY SOME SPECIFIC GOODS

TO THE BUYER AT A FUTURE DATE IN EXCHANGE OF ANADVANCE PRICE FULLY PAID AT THE TIME OF CONTRACT.


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Dubai Islamic Bank

The Worlds First Islamic Bank

The largest Islamic Bank in UAEAmongst the top 4 Banks in

the country

Government ownership 34%

Part of the Big Five IslamicBanks in the world

Globally recognized Leaderand Innovator in Islamic Banking

Strong Domestic FranchiseNearly 600,000 retail customers

49 branches / nearly

300 ATMs, CDM


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DIBs principal business is focused on its

five core units

Largest business unit within DIBFull range of products and services

Customer segments: Mass affluent, Wealth management, SME

One of the largest Retail customer base in UAE

Market leaders: Deposits products and Auto finance

Retail &

Business

Banking

Real Estate,Contracting

Finance, DirectEquities

Investment

Banking

Corporate

Banking

Treasury

Millennium Capital and Millennium Finance subsidiaries incorporated in DubaiInternational Financial Centre

Investment banking activities such as project finance, loan syndication, capitalmarkets, asset management and structured finance as well as Corporate AdvisoryServices

Global leaders in Sukuk issuance: #1 in the Bloomberg league table in 2006 Leading provider of Real Estate Finance services in the UAE with significant role in

supporting real estate developments

Financing to contractors in the oil, gas, power and water sectors

Short term equity investments in established companies and business start-ups

across MENA region Large & Middle Market

Bankers to top corporate houses in GCC

Financing for Trade and Manufacturing and Infrastructure

Cash Management capabilities

Foreign exchange services

Asset-liability management

Islamic derivatives


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Dubai Islamic Bank Strategic Agenda

To be

amongstthe Top

33Banksin UAE

Growth drivers to beRetail, Corporate Banking &

Investment Banking

Leveraging on the successin Dubai to capitalize on

opportunities in other Emirates

Evolving froma pure banking entity

to a more comprehensiveFinancial Services Group

Diversifying DIBs revenue streamsthrough penetration and presencein new markets in the MENA region

Continually innovate using thelatest technology and product expert

leading to ease and convenience

Focus on Value Growth:cross selling,

new Islamic productsembed cost awareness


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Portfolio Diversification, Business

Overview

Diversified portfolio both with respect to economic sectors and customersegments

Key economic sectors include government / public sector and real estate

Among the most significant Arrangers of financing for Dubai Government

Segmental Revenue; % of Total Revenue (2007)Sectorial Exposure of Financial Assets (2007)

Real Estat

26%

Financial

Institution

38%

Retail

10%

Manuf / Service

19%

Govt

7%


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Mega Deals

US$ 3.52 Bn Sukuk issue for Nakheel(Dubai World)

US$ 3.5 Bn Sukuk issue for PCFC(Govt of Dubai)

US$ 2 Billion Sukuk for Dubai CivilAviation for expansion project of DubaiInternational Airport

US$ 600m Government of MalaysiaSukuk

US$ 600m Pakistan Sovereign Sukuk

US$ 550m Sukuk for Emirates Airlines

US$ 530m Lead Arranger for Qatar Gas

II

Awards & Accolades (2005-07)

Best Bank in UAE, 2006: The Banker

Best Islamic Bank in ME, 2006:

Euromoney Best Debt house UAE, 2005: Euromoney

Best Sukuk House, 2005: Euromoney

Award for Finance (2005): ShaikhMohammed Bin Rashid Business Award

Quality Recognition Award, 2005: JPMorgan Chase

Banking Achievement Award for theMiddle East, by Emerging MarketsPublication during the IMF Conference in

New York, Oct07

An Integral, Recognized player in the IslamicFinance sector


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Products and Services


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Ready Market:

A conventional stock market also known as the regular market,where buyers and sellers come together to trade shares.

Settlement of trade occurs 2 days after the trade.

Cash Settled Futures:

A standardized contract, to buy or sell a certain underlying

instrument at a certain date in the future, at specified price. Allsettlement occurs purely on cash basis. Depending on thecontract, settlement occurs 30, 60 & 90 days after the contract ispurchased.


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Stock Index Futures:

Stock Index Futures are traded in a number of contracts. Eachcontract is to buy or sell a fixed value of the index. Stock IndexFutures Contract occurs 90 days after the contract ispurchased.

Deliverable Futures:

Forward contracts to buy or sell a certain underlyinginstrument with actual delivery of the underlying instrument

occurring. Settlement occurs 30 days after the contract ispurchased.

- CFS (discontinued)- COT (discontinued)


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Company Services

Customized services and state-of-the-art technologyinfrastructure, have given us an edge over other exchanges inthe region.

Fully automated trading, clearing and settlement system.

Internet routed trading facility. Gateway trading (Order Management System).

Investors and fund managers can also access informationthrough Display Only Terminal

Internet trading facilities available.

Order-driven system . Brokers connectivity to KSE through VPN (to ensure security of

data).


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Data Services:

TV channels also display KSE ticker through live feeds from KSEsystem.

Investors provided customized data packages for trading andassessment of their portfolio on a real time basis.

Data feed provided to major international redistributors(Reuters, Bloomberg) on real time basis.

KSE website offers data of market on real time basis, includinglisted company profiles, snap shot of financials, press releasesand summary of market activities on real time basis.


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Over the last three decades Islamic banking and finance has

developed into a full-fledged system and discipline

reportedly growing at the rate of 15 percent per annum.

Today, Islamic financial institutions, in one form or the other, are

working in about 75 countries of the world.

In Malaysia, Bahrain, Pakistan and a few other countries of the

Gulf, Islamic banks and financial institutions are working as a

system parallel with the conventional system.

Islamic Banking Global Scenario


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In Britain, the Financial Services Authority has issued Islamic

banking license to the Islamic Bank of Britain, which has

been sponsored by Gulf and UK investors.

The United States of America has appointed Dr. Mahmoud El

Gamal, an eminent economist/expert on Islamic banking to

advise the US Treasury and Government departments on

Islamic finance in June 2004.

Both US and Britain have over two dozens of Islamic financial

institutions each for providing Riba free financing facilities to

their Muslim communities.

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