Al huda presentation on islamic finance nibaf

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Transcript of Al huda presentation on islamic finance nibaf

  • 1.

2. Outline of Presentation

  • Introduction and Brief Perspective of Islamic Finance
  • Product Tree forIslamic Agricultural Finance
  • Takaful
  • Takaful Products for Islamic Agricultural Finance.
          • Presented by :
          • Zubair Mughal
    • AlHuda : Centre of Islamic Banking & Economics
      • Regional Head Takaful Pakistan Limited
  • [email_address]
  • [email_address]

3. Industry Progress in Pakistan

  • Currently there are 6 full fledged Islamic Banks, while
  • 6 Full fledge Banks having 186 and 12 Conventional Banks have 103 SAIBBS
  • Total IB Branches = 289

Year2001

  • Meezan Bank
  • Al Baraka
  • Meezan Bank
  • Al Baraka
  • MCB
  • Alfalah
  • SCB
  • Bank AlHabib
  • Habib AG Zur.
  • Metropolitan
  • Bank of Khyber
  • Soneri Bank

2002 2003

  • Meezan Bank
  • Al Baraka
  • MCB
  • Meezan Bank
  • Al Baraka
  • MCB
  • Alfalah

2 10 2006 - 07

  • Meezan Bank (100)
  • Al Baraka (18)
  • MCB (8)
  • Alfalah(32)
  • SCB (8)
  • Bank AlHabib(4 )
  • HMB(4)
  • Bank of Khyber(17)
  • Soneri Bank ( 4)
  • HBL(1)
  • Bank Islami(36)
  • DIB (17)
  • EGIBL (10)
  • Dawood(5)
  • NBP(3)
  • ABN AMRO (3)
  • Askari(14)
  • UBL (5)

2004 - 05 18 4 3 4. Industry Progress in Pakistan 5. Industry Progress in Pakistan 6. Industry Progress in Pakistan 7. Takaful Companies in Pakistan

  • There are Four Takaful Companies now Operating in Pakistan
  • Takaful Pakistan Limited
  • Pak Kuwait Takaful Company Limited.
  • Pak Qatar General Takaful
  • Pak Qatar Faimly Takaful.

8. Sukuk Development in Pakistan.

  • Motorway Sukuk-
  • Wapda 1th & 2 ndSukuk
  • Pakistan Shipyard Sukuk
  • Pakistan Industrial Park Sukuk
  • PIA Sukuk
  • Sui soturen
  • PASSCO
  • Liberty Energy
  • Sitara Chemicals
  • PEL
  • Amtex Textile
  • HBFC Sukuk
  • Arzo Textile
  • Dawood Herculesetc

9. Islamic products and services offered by 300+Financial Institutions around the world

  • .
  • United States: 20
  • -Al Manzil Financial Services
  • - American Finance House
  • - Failaka Investments
  • - HSBC
  • - Ameen Housing Cooperative
  • Germany:4
  • - Bank Sepah
  • - Commerz Bank
  • - Deutsche Bank
  • Switzerland: 6
  • UK: 26
  • - HSBC Amanah Finance
  • - Al Baraka International Ltd
  • - Takafol UK Ltd
  • - The Halal Mutual Investment Company
  • - J Aron & Co Ltd (Goldman Sachs)
  • Bahrain: 26
  • - Bahrain Islamic Bank
  • - Al Baraka
  • - ABC Islamic Bank
  • - CitiIslamic Investment Bank
  • Malaysia: 49
  • 2 - Pure Islamic Banks (Bank Islam, Bank Muamalat)
  • Rest - conventional banks
  • Saudi Arabia: 17
  • - Al Rajhi
  • - SAMBA
  • - Saudi Hollandi
  • - Riyadh Bank
  • UAE: 13
  • - Dubai Islamic Bank
  • - Abu Dhabi Islamic Bank
  • - HSBC Amanah
  • Qatar: 4
  • - Qatar Islamic Bank
  • - Qatar International Islamic
  • Kuwait: 9
  • - Kuwait Finance House
  • Iran: 8
  • Egypt: 12
  • - Alwatany Bank of Egypt
  • - Egyptian Saudi Finance
  • Indonesia: 4
  • Sudan: 9
  • Pakistan: 21
  • India: 3
  • Bangladesh:9
  • Turkey: 7
  • - Faisal Finance Institution
  • - Ihlas Finance House
  • Yemen: 5

10. International Overview

  • The size of Islamic Financial Industry has reached US$ 300 Bln. and its growing annually @ 15% per anum.
  • 71 countries have Islamic Banking Institutions
  • 38 Muslim countries including Bahrain, UAE, Saudi Arabia,Malaysia, Brunei and Pakistan
  • 33 non-Muslim countries including USA, UK, Canada, Switzerland, South Africa and Australia

11. International Overview

  • Leading foreign Banks have opened Islamic Banking windows or subsidiaries such as:
    • Standard Chartered Bank
    • Citibank
    • HSBC
    • ABN AMRO
    • UBS

12. International Overview

  • In Feb 1999, Dow Jones introduced the Dow Jones Islamic Market Index (DJIM) of 600 companies world wide whose business complies with Islamic Shariah laws
  • At present there are more than 105 Islamic Funds operational through out the world with a total fund base of over USD 3.50 billion

13. International Overview

  • Governments of Bahrain ,Malaysia and now Pakistan have issued Islamic Bonds (Sukuk) in order to facilitate Islamic Banks in managing their liquidity.
  • Issuance of these bonds has also paved the way for Shariah compliant Government borrowings

14. International Overview

  • Institutions like Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and Islamic Finance Services Board (IFSB) have been formed.
  • These institutions are playing a key role in setting up and standardizing Shariah , Financial and Accounting standards for Islamic Financial Institutions.
  • Due to these collective efforts Islamic banking is now recognized by IMF, World Bank and Basel Committee.

15. PRODUCT TREE Modes of Islamic Agricultural FinanceTrade BasedModes Partnership BasedModes Rental BasedModes

  • Musharaka
  • Mudaraba
  • Muzarah
  • Murabaha
  • Musawama
  • Salam
  • Istisna
  • Ijarah
  • Diminishing
  • Musharaka

16.

  • Takaful
  • ( Islamic Insurance )

17. Introduction

  • Takaful is the Sharia Compliant brand name for the Islamic alternative to conventional insurance. Its based on the principle of Taawan or mutual assistance. It provides mutual protection and joint risk sharing in the event of a loss by one of its member

18. Why Insurance ?

  • Is Some thing wrong with Concept ?
  • Risk Aversion
  • Assuring others
  • Risk sharing

19. From the Holly Quran

  • The need for insurance is shown in the following verse of The Quran.
  • Those of you who die and leave widows should bequeath for their widows a years maintenance and residence (2.240)

20. From the Hadiths

  • By Anas-bin-Malik, One day Prophet Muhammad(PBUH) notced a bedouin leaving his Camel without tying it. He asked the bedouin, Why dont you tie down your camel? The Bedouin answered, I put my trust in Allah (SWT). The Prophet (PBUH) then said, Tie your camel first, then put your trust in Allah(SWT)

21. What wrong with practice ?

  • The contract between the insurer & the insured is technically wrong from the sharia perspective because of
  • Gharar (Uncertainty))
  • Gambling (Qamar & Maisir)
  • Interest (Riba)

22. Riba in Insurance

  • Direct Riba
    • Excess on one side in case of exchange between the amount of premium.
  • Indirect Riba
    • The interest earned on interest based investments

23. Gharar

  • Lexically it means uncertainty and technically it means the uncertainty of the counteract or the subject matter.

24. Investment Income Operational Cost of Takaful / ReTakaful Claims & Reserves Surplus (Balance) P A R T I C I P A N T ST A K A F U LF U N D(P.T.F.) Mudaribs Share of PTFs Investment Income Wakalah Fee Management Expense ofthe Company Profit/Loss S H A R EH O L D E R SF U N D(S.H.F.) Participant WAQF Takaful Operator Share Holder Operating Model in Pakistan Investme