intrnship report submitted by Jaleel Ahmed
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Internship Report DUBAI ISLAMIC BANK LIMITED BANK ROAD SADDAR RAWALPINDI Internship Duration Eight Weeks (January 26, 2009-March 26, 2009) Submitted by: JALEEL AHMED M.Sc Islamic Banking and Finance Registration # 99-SE/MSCIBF/F06 School of Islamic Banking and Finance 1
Transcript of intrnship report submitted by Jaleel Ahmed
Internship Report
DUBAI ISLAMIC BANK LIMITEDBANK ROAD SADDAR RAWALPINDI
Internship DurationEight Weeks
(January 26, 2009-March 26, 2009)
Submitted by:JALEEL AHMED
M.Sc Islamic Banking and FinanceRegistration # 99-SE/MSCIBF/F06
School of Islamic Banking and Finance International Institute of Islamic Economics
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PREFACEThis report is based on Dubai Islamic Bank. I have
tried my best to cover all the departments, products
and services of Dubai Islamic Bank. In planning this
report I carefully assessed all the requirement of IBF
authorities. This aided me enormously in evolution of
the various aspects of Dubai Islamic Bank. All the
information that I required for the purpose of my
report was gathered though different sources like
practical experience and official website of Dubai
Islamic Bank.
I feel this long report contains sufficient material
about Dubai Islamic Bank and tends to emphasize on
all the departments of Dubai Islamic Bank.
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Quranic Verse [2:278-279] …………….!
" O ye who believe! Fear Allah, and give up what
remains of your demand for usury, if ye are Indeed
believers. "
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LIST OF CONTENTS
1. VERSUS FROM QURAN-----------------------------------------------05
2. INTRODUCTION TO ISLAMIC BANKING------------------------06
3. FAQ'S ABOUT ISLAMIC BANKING--------------------------------12
4. VISION STATEMENT OF DUBAI ISLAMIC BANK--------- ---18
5. MISSION STATEMENT OF DUBAI ISLAMIC BANK----------19
6. DUBAI ISLAMIC BANK VALUES-----------------------------------20
7. DUBAI ISLAMIC BANK CREDIT RATING-----------------------21
8. INTRODUCTION AND HISTORY OF DIB------------------------22
9. MANAGEMENT OF DUBAI ISLAMIC BANK--------------------29
10. DIB SHARIA BOARD AND MEMBERS----------------------------34
11. DIVISIONS AT DUBAI ISLAMIC BANK--------------------------36
12. DUBAI ISLAMIC BANK CORPORATE BANKING--------------40
13. BREAKDOWN OF MY TIME AT DIB------------------------------80
14. SALES DEPARTMENT OF DIB-------------------------------------81
15. OPERATIONS ---------------- 105
16.WEAKNESSES------------------------------------ 106
17.SUGGESTIONS------------------------------------ 107
18.CONCLUSION ------------------------------------ 108
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INTRODUCTION OF ISLAMIC BANKING
The roots of Islamic banking activity, such as acceptance of deposits and the rejection of
interest, go back to the days when the Prophet Muhammad was still alive. At that time,
people deposited money with the Prophet himself, or with Abu Bakr Siddique, the First
caliph of Islam. But the Islamic banking system as we now know it only began to evolve
towards the end of the 1960s when several Muslim countries started to put the idea into
practice. Early models began emerging in the 1970s, but found difficulty in implementing
full compliance with Islamic principles. During the same period, Islamic accounting, an
essential tool for the success of Islamic banks, was being developed and in 1973 the first
meeting of the Islamic Organization Conference (IOC) in Jeddah discussed the
desirability of abolishing fixed interest rates and creating financial systems based on
Islamic beliefs. Dubai Islamic Bank was formed in 1975 as the first fully-fledged Islamic
bank, and many more have since been founded under the Islamic profit-and-Loss sharing
system.
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MODERN PHASES IN ISLAMIC BANKING
• Expansion (1976 to the early 1980s): Islamic banking spread from the Gulf eastward to
Malaysia, and westward to the UK. More than 20 Islamic banks were established,
including international and intercontinental institutions.
Islamic banking associations or consultancy bodies also broadened their operations.
• Maturity (1983 to date): The Arab world was confronted by economic setbacks,
including slowdowns in oil revenues, the relative strength of the US dollar, higher
interest rates, and capital outflows. At the same time Arab banks opened branches in the
United States and Islamic banking practices were implemented in both Pakistan and Iran.
The earliest theoretical model for Islamic banking was based on two-tier Mudaraba, with
profit-sharing replacing interest in bank-depositor as well as bank-borrower relationship.
Islamic banks would be financial intermediaries, like conventional commercial banks,
only they would purge interest from all their operations relying on partnership and profit-
sharing instead. During 1980s Islamic banking and finance received broad-based
academic and professional attention. Several universities started teaching the subject and
encouraged research resulting into hundreds of PhD dissertations, some of them in the
universities in Europe and America. Numerous seminars and conferences were held in
places as wide apart as Kuala Lumpur, Dhaka, Islamabad, Bahrain, Jeddah, Cairo,
Khartoum, Sokoto (Nigeria), Tunis, Geneva, London and New York. A number of
research canters made Islamic economics their field, paying special
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Attention to money and banking. Some of these launched academic journals providing
forums for exchange of views and dissemination of information on a worldwide scale.
The original model was further developed and refined and the liabilities side saw
frameworks put in place for handling trust funds, venture capitals, and financial papers
based on ijara (leasing) salam (forwards) and murabaha (mark-up). The special
techniques for launching Sharia compatible mutual funds were also developed in this
period. This involved selecting companies whose shares could be traded as they did not
violate any Sharia norms. Islamic banks, led by Dubai Islamic Bank, are now becoming
fully competitive in all areas of banking activity as they shed their image of being in
existence only for Muslims and to meet religious obligations. In the process, Islamic
banking is being increasingly recognized as a fairer alternative to traditional commercial
banking and is consequently attracting many non-Islamic customers – motivated by the
perceived superiority of the system.
WHY ISLAMIC BANKING
In the light of Allah’s commands, it is obligatory on us to try to find and adopt the right
banking system, one that follows the principles set by the Creator. Those who learn to
differentiate between what has been allowed and what has been forbidden will be the
ones with a clear conscience when they assemble in front of the Creator.
Allah has clearly ordained the prohibition of Riba in the Glorious Quran. Verses [2:278-
279] translate into:
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”O ye who believe! Fear Allah, and give up what remains of your
demand for usury, if ye are Indeed believers."
"If ye do not, take notice of war from Allah and His Messenger: but if ye
repent, ye shall have your capital sums; Neither will you deal with
others unjustly, nor shall you be dealt with unjustly."
Beware! false interpretations of these verses has led many individuals to assume that the
prohibition only relates to situations where the creditor is likely to charge exploitatively
high rates of interest. It is wrong to see the above translation as proof that the (sole)
objective served by the prohibition of Riba is the avoidance of injustice (in the sense of
exploitation of the poor debtor by the rich creditor). In Islam, there is no room for Riba,
marginal or otherwise. Riba gives birth to an economic system that is unjust; one that
favors the rich at the expense of the poor. Rather than reward for effort and
entrepreneurship with profit, the Riba based economic system rewards capitalists.
Islamic Finance attempts to create a fair economic system. It works on the principle of
profit and loss sharing. Riba (Interest) is strictly prohibited in all its forms and kinds.
Islamic banks enter into trade and investment to earn Halal profit as they neither take
deposits/funds on interest nor do they advance loans on interest. They have to purchase
and sell assets in order to make profit from the higher sale prices or enter into investment
arena. The most common sale contracts used by Islamic banks are Murabaha, Salam,
Istisna, sale on deferred payment basis while Ijara is the sale of the usufruct of an asset
owned by the bank. For investment, the Islamic banks have Mudaraba, Musharaka and
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Wakala structures. Islamic banks have to strictly comply with the principles and rules of
Sharia which prohibit outright any transaction involving alcohol, pork, gambling, etc.
Further, the Islamic modes of finance and investment used by these banks must fulfill the
basic conditions of the contracts to be considered Sharia compliant.
For example in an Islamic mortgage transaction, instead of lending money to the buyer,
an Islamic bank buys the item from the seller, and sells it to the buyer at a profit with the
sale price deferred and paid to the bank by the buyer/customer in installments. This mode
of financing is called Murabaha. It is a Sharia requirement that the bank must purchase
the asset and get the title/ownership, and hence the associated risks and potential benefits
before selling it to the customer. In conventional financing, the bank does not assume
ownership or the associated risk. In such a system, capital alone is used to produce more
capital.
DIBPL has a full fledged Sharia Department that monitors every transaction the bank is
involved in. All products, marketing material and campaigns are also certified by this
department ensuring that nothing is in conflict with the guidelines of Sharia. Moreover
Sharia Audit is conducted to ensure that none of the bank’s income is from transactions
that were Sharia prohibited. If such a case is found the income from the mentioning
transaction is removed from the bank’s profit and donated to charity.
FREQUENTLY ASKED QUESTIONS ABOUT ISLAMIC BANKING
What is Islamic banking?
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It is a banking system which is consistent with the rules and principles of Sharia and
conducted under direct supervision and audit of Sharia scholars.
What is Interest/ Riba?
Interest/Riba is a rent of money or the time value of money. In fact, it is the additional
amount charged by a creditor in lieu of the time that he gives to the borrower for
repayment or delay in payment.
What are the major modes of Islamic banking and finance?
Following are the most commonly used modes of Islamic banking and finance.
• MURABAHA is a sale contract on cost plus an agreed profit.
• IJARA is a leasing contract in which usufruct of an asset is transferred to the lessee
for an agreed rental. .
• MUDARABA is a form of partnership where one party provides the funds while the
other provides management services against a pre-agreed share in the profit of the
investment. However if there is any loss it is borne solely by the capital provider.
. • MUSHARKA is a partnership with all the parties contributing to the capital of the
Musharaka on the basis of profit and loss sharing.
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Is it permissible for an Islamic bank to impose penalty for late payment?
If Islamic banks do not impose any penalties on late payment; the customers shall not pay
in time and thus the Islamic banks will not be able to run their business efficiently and
give a good return to the investors. Therefore, the Islamic banks have decided to take
from each client an irrevocable undertaking that in case of late payment he shall be
charged a penalty which shall be donated to a charity supervised by the Sharia Board of
the bank independently from the bank.
How do Islamic banks make profit?
The Islamic banks invest/utilize the funds received from the Account Holders/customers
under Islamic modes of financing such as Ijara, Murabaha, Salam, Istisna and investment
contracts such as Mudaraba, Musharaka, Wakala etc. to generate profit.
Do Islamic banks have credit cards?
Yes, Islamic banks offer interest free credit card facility for which the client pays an
annual fee irrespective of the way he uses the card during the year. The fee is in lieu of
some real services that a credit card holder becomes entitled to. The fee neither increases
nor decreases on the basis of the use, frequency of usage or non-use of the card by the
customer.
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Is there any difference between Interest and Usury?
No, both have the same meaning. Quran, Sunnah and Fiqh do not differentiate between
the two. Islamic terms what is known as interest or usury as Riba and therefore prohibits
it.
How Islamic banking is different from conventional banking?
Islamic banking offers Riba free banking governed by Islamic Sharia rules. It neither
gives nor takes loans on interest. It operates as a trading company which buys, sells and
enters into different modes and contracts of investment such as Mudaraba, Musharaka
etc.
Differenc
e between Islamic Banking & Conventional Banking
One must refrain from making a direct comparison between Islamic banking and
conventional banking (apple to apple comparison). This is because they are extremely
different in many ways.
Conventional Banks Islamic Banks
1. The functions and operating modes of 1. The functions and operating modes of
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conventional banks are based on fully
manmade principles.
Islamic banks are based on the principles of
Islamic Sharia.
2. The investor is assured of a predetermined
rate of interest.
2. In contrast, it promotes risk sharing
between provider of capital (investor) and the
user of funds (entrepreneur).
3. It aims at maximizing profit without any
restriction.
3. It also aims at maximizing profit but subject
to Sharia restrictions.
4. It does not deal with Zakat. 4. In the modern Islamic banking system, it
has become one of the service-oriented
functions of the Islamic banks to be a Zakat
Collection Centre and they also pay out their
Zakat.
5. Lending money and getting it back with
compounding interest is the fundamental
function of the conventional banks.
5. Participation in partnership business is the
fundamental function of the Islamic banks. So
we have to understand our customer’s
business very well.
6. It can charge additional money (penalty
and compounded interest) in case of
defaulters.
6. The Islamic banks have no provision to
charge any extra money from the defaulters.
Only small amount of compensation and these
proceeds is given to charity. Rebates are
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giving for early settlement at the Bank’s
discretion.
7. Very often it results in the bank’s own
interest becoming prominent. It makes no
effort to ensure growth with equity.
7. It gives due importance to the public
interest. Its ultimate aim is to ensure growth
with equity.
8. For interest-based commercial banks,
borrowing from the money market is
relatively easier.
8. For the Islamic banks, it must be based on a
Sharia approved underlying transaction.
9. Since income from the advances is fixed,
it gives little importance to developing
expertise in project appraisal and
evaluations.
9. Since it shares profit and loss, the Islamic
banks pay greater attention to developing
project appraisal and evaluations.
10. The conventional banks give greater
emphasis on credit-worthiness of the clients.
10. The Islamic banks, on the other hand, give
greater emphasis on the viability of the
projects.
11. The status of a conventional bank, in
relation to its clients, is that of creditor and
debtors.
11. The status of Islamic bank in relation to its
clients is that of partners, investors and trader,
buyer and seller.
12. A conventional bank has to guarantee all
its deposits.
12. Islamic bank can only guarantee deposits
for current account, which is based on the
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principle of al-wadiah, thus the depositors are
guaranteed repayment of their funds, however
if the account is based on the mudarabah
concept, client share in a profit and loss.
How would it be possible to forecast long term profit rate?
No one can forecast profits. Islamic banks declare the profit of their investment pools
periodically and the declared rates can be referred to show their past performance with a
clear disclaimer that the bank may or may not perform similarly in future.
Would you be catering to the customers involved in business/activities prohibited in
Islam?
No, Islam does not allow business in prohibited items. This is one of the major
differences between an Islamic bank and a conventional one.
Who is eligible to open accounts in Islamic banks?
All persons (individual, corporate entities, firms, societies, clubs, government,
originations, statutory bodies/corporations, public and private institutions, etc.) are
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eligible to open account in Islamic banks provided they fulfill the banks’ and the
regulatory authorities requirements.
How can we ensure that all the investments are in line with the pronouncements and
directives of the Sharia Board?
All investments are first approved before signing the contracts by our Sharia Board. The
Sharia auditors monitor the operations of the Bank and the implementation process. If
they find any transaction implemented in a Sharia prohibited way they take away its
return and deposit it in a charity.
Is Islamic banking services offered to Muslims only?
No, Islam does not prohibit from selling or buying or entering into partnership with non-
Muslims provided the transactions are Sharia compliant.
What would be the procedure and ratio of Zakat deduction in accounts maintained
at DIB?
As per the Government policy which is 2.5%
In a loss event does the customer bear any loss?
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Yes, the Account Holder bears the loss in proportion to its investment.
Is insurance allowed in Islamic banking?
Yes, but in an Islamic manner. The form of Islamic insurance is TAKAFUL which is
based on Sharia rules. In case of absence of a Takaful based company, we are allowed to
get insurance through conventional insurance to avoid exposing the investors’ deposits to
high risk.
Does Islamic bank offer loans?
Islamic bank does not offer loans. It offers financing through Sharia compliant modes of
investment and transactions.
What is a Takaful?
Takaful is the Islamic way of Insurance. Takaful means mutual protection and joint
guarantee through contribution by each member.
How is Takaful different from conventional insurance?
Takaful eliminates the element of chance, gambling and ambiguity:
a. investing the deposit pool in only Sharia compliant products.
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b. the participants are investors and they share the profit of their investment. At the same
time they compensate those of the group who are exposed to losses. .
Is there a Takaful company in Pakistan?
Yes, Pak-Kuwait Takaful Company Ltd. has launched its operations in Pakistan with
effect from 1st December’05.
VISSION STATEMENT OF DIB
"DIB Pakistan will be the leading provider of world class banking – the
Islamic way by being the first choice of our customers and our employees."
MISSION STATEMENT OF DIB
“DIB Pakistan provides Sharia compliant financial services and products
through the best of innovation, talent and technology.”
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DIB VALUES
We Value:
Trust
Listening
Innovation
Social Responsibility
Fun
DIBPL’s Credit Rating for 2007
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JCR VIS has reaffirmed DIBPL’s credit rating of ‘A’ (single A) and short
term rating of ‘A-2’ (A Two) for the year 2007, where as the outlook on the
organization remains ‘stable’. .
INTRODUCTION
Dubai Islamic Bank Pakistan brings with it a legacy of outstanding success, constant
innovation and a solid commitment to practice Islamic financing to the letter and spirit.
Dubai Islamic Bank Pakistan is a wholly owned subsidiary of Dubai Islamic Bank
headquartered in UAE. As the world’s first Islamic bank, Dubai Islamic Bank has
maintained its status quo as the undisputed market leader in Islamic financing since its
inception in 1975. DIB is the leading arranger of Sukuk issuances globally and has led
the single largest Sukuk in the world. DIB’s Sharia expertise is respected globally. DIB is
proud to have received numerous prestigious awards for its innovative Islamic Finance
deals.
Having set a standard of excellence in the UAE, The Bank offers state-of-the-art Islamic
banking solutions and creates a centre of excellence in Pakistan. DIB is committed to
providing Sharia compliant solutions to major local and international companies as well
as private individuals.
Dubai Islamic Bank commenced its operations in Pakistan, with the opening of its first
branch in the commercial city of Karachi in March 2006 at Avari Towers. DIBP is
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pursuing an aggressive expansion plan and already has 18 branches in nine major cities
including Karachi, Lahore, Rawalpindi, Islamabad, Peshawar, Faisalabad, Multan,
Gujranwala and Gujrat.
Dubai Islamic Bank Pakistan offers services in Consumer, Business and Corporate and
Investment Banking, at par with the international banking scenario. The Bank is
committed to providing Sharia-compliant solutions to major local and international
companies as well as private individuals. The Bank also provides Sharia compliant home
mortgage financing and has recently launched an Islamic Visa Debit Card.
In a short span of three years Dubai Islamic Bank Pakistan has emerged as one of the
fastest growing banks in Pakistan, recording an incremental growth of 152 percent in its
total asset base which stands at PKR 21 billion as of Dec 2008. DIBP customer base has
grown by 228% to approximately 40,000 customers in 2008, up from 6,400 in the year
2006. For the same period, DIBP deposit base has grown by 273% to Rs 16.1 billion in
2008. The share capital of DIBP stands at Rs 5 billion.
Dubai Islamic Bank Pakistan has remained actively abreast of the industry by offering a
number of world class products and services in corporate and consumer banking. Of the
products introduced last year, DIBP Auto Finance registered a volume of Rs 2.9 billion
within 9 months of its launch. In a market where cut throat competition persists, this
reflects a great success for the Bank.
Similarly, the unique Home Finance facility, offered by Dubai Islamic Bank Pakistan
garnered an equally overwhelming response. Within the first three months, DIBP Home
Finance was the industry leader in the entire banking industry by far achieving a
milestone of the fastest billion marks. DIBP Home Finance maintained its market
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leadership throughout the year 2007 and in only 12 months time DIBP Home Finance
registered a volume of Rs 2.6 billion, which is the fastest growth rate in the entire
industry.
On the corporate side, Dubai Islamic Bank Pakistan is at the forefront of product
innovation and development. During the year 2006–07, Dubai Islamic Bank Pakistan
arranged Sukuks worth PKR 24 billion, which is 41% of the total domestic Sukuk
issuances. Dubai Islamic Bank Pakistan has played the role of lead arranger for most of
the issuances it has been associated with.
Dubai Islamic Bank Pakistan Ltd. has been instrumental in developing this hitherto
unexplored market for Sukuk and has been on the forefront in innovative Sukuk
structures. At present, DIBP is focusing on structuring Sukuk for Infrastructure, Power,
Telecom, Consumer Goods, and Textile sectors. DIBP also has the privilege of working
closely with the government sector for developing Sukuk as an alternative mode of
financing for various public sector initiatives.
Aside from providing regular banking services, Dubai Islamic Bank Pakistan plans to
take on the role of both an investor and a facilitator to serve as a catalyst for further
investment in the country. During the Bank’s launch phase alone, Pakistan benefited from
a US $100 million in the country. This launch is not the first step taken by the Bank in
being part of Pakistan's growing economy. It was only recent that Dubai Islamic Bank
played an active role in developing the market of Islamic commercial paper in Pakistan
when the bank participated as a co-manager of the Sovereign Islamic Sukuk issue.
Dubai Islamic Bank Pakistan has also been very active in attracting foreign direct
investment. In fact, Dubai Islamic Bank is already working closely with a number of
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UAE based large business corporations such as Dubai Ports, Nakheel LLC and Emaar in
identifying opportunities and channeling hard flows into the country. The Bank has also
been actively involved in bringing Body Shop to Pakistan and is honored to act as the
sole financial adviser for the company’s operations in the Pakistan.
HISTORY
The city of Dubai witnessed the launch of first Islamic bank, in a true sense of the word,
on 29 Safar 1395 Hijri, March 12, 1975. The launch of Dubai Islamic Bank coincided
with the rapid economic development UAE witnessed with the discovery of oil besides
the increasing importance of Dubai as commercial hub of Gulf and the Middle East.
Dubai Islamic Bank also known as ‘Al-islami’, has over the years, inspired the
establishment of many Islamic banks and financial institutions world over. The Best
Islamic Bank award and New Product Innovation award from the prestigious Banker
Middle East in 2005 reconfirms DIB’s core competencies in areas of customer service
and the overall success of its direction and strategy.
To enhance its presence in the regional and international market, DIB has invested in a
number of projects in highly productive economic sectors such as power, transportation,
telecommunication, real estate and others. The most noteworthy of these investments are
Pakistan Telecommunication Company, which is one of the largest UAE investments in
Pakistan and UAE, and Al Khartoum Bank, is one of the largest investments in Sudan.
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State Bank of Pakistan (SBP) awarded the license to Dubai Islamic Bank for the
establishment of its operations in Pakistan on Saturday, November 26, 2005 at the State
Bank of Pakistan.
As part of DIB’s global expansion plans, along with the observation of the economic
stability and growth of banking sector in Pakistan, the bank will create a centre of
excellence in Pakistan for products and professionals in the field of Islamic Banking. The
bank aims to offer state-of-the-art Islamic banking solutions, with world class products
and services. These would include services in Retail, Private, Johara, Business,
Corporate, Real Estate and Investment Banking; including advisory and equity services.
DIBP is a Public Limited concern. Its total worth is Rs. 2.1billion which will gradually
increase to Rs. 6 billion. DIBP is 100% owned by DIB PJSC (Public Joint Stock
Company) and its nominated share holders. It is a listed company in Dubai and we shall
soon be a listed company in KSE.
MANAGEMENT OF DIB
M. A. Mannan (CEO)
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With over 15 years of banking experience and a Masters degree in Business
Administration from the Institute of Business Administration – Karachi, M. A. Mannan is
spear-heading the country operations of Dubai Islamic Bank Pakistan in his role of the
Bank’s CEO.
Having played a pivotal role in the Bank’s launch, Mannan has successfully managed the
challenges of establishing, from scratch, a full fledged consumer corporate and
investment bank that is now manifesting its potential.
Prior to joining DIB, he was Deputy CEO & Head of Global Consumer and Commercial
Bank of UBL, Pakistan's third largest bank. He was instrumental in turning around UBL
and launched Consumer banking from scratch. Mannan joined UBL from Citibank USA
where he was heading the Cross Sell business and before that was part of the pioneering
team to launch Consumer Banking in Pakistan.
Being a consistent top performer since the beginning of his career, Mannan’s fast track
growth pattern and innate quest for innovative solutions are the reason behind his
personal and professional success that has translated into tangible results for Dubai
Islamic Bank Pakistan. Under his wing, the Bank, in the span of its short stay in Pakistan
has become a full-fledged tour de force.
Azhar Aslam (Head of C & IB)
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Azhar Aslam has over 16 years of experience. He has worked with American Express
Bank as Relationship Manager, Citibank as Senior Relationship Manager and Branch
Manager and Standard Chartered Bank as Unit Head, Cash Management and Local
Corporate Group. His last assignment with Standard Chartered Bank was Corporate Bank
Head South. He has the experience of both relationship and product management for
Local, Public Sector and Multinational sector companies. Azhar joined the DIBP in 2006
and established the North portfolio from scratch including top tier corporate relationships
and deepened the commercial portfolio.
Syed Mujtaba Abbas (Head of Consumer Banking)
Syed Mujtaba Abbas has worked for Standard Chartered & ANZ Grind lays Bank for
more than 15 years in various senior capacities and has experience of local and
international markets including Pakistan, Australia, UK and Middle East.
Last few responsibilities were Head of Credit, Collections & Risk Management, General
Manager Unsecured Business, and Regional Head of Decision Sciences & Strategy for
Middle East & South Asia and Project Director for CB Integration & Risk Management.
Ehtesham Ali (Head of Operations)
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Ehtesham Ali has more than 20 years experience in International Banking Operations,
Systems & Procedures Development and FI. He has worked for Metropolitan Bank,
Union Bank, Bank Al-Habib and BCCI in various executive positions. He is currently
Chairman, Banking Commission, ICC Pakistan since April, 2007.
Tahir Nazir Chaudhary (Head of Risk Management)
Tahir Nazir Chaudhary has around twenty years of banking experience. He started his
career in banking as a management trainee in ANZ Grind lays Bank in 1987. Prior to that,
he briefly worked with NDLC. While at ANZ he worked in various areas of the bank
including corporate banking, operations, consumer banking and with ANZ Islamic
Banking Division in London and Bahrain. In Standard Chartered, he mainly worked as
Unit Head Corporate Banking and Head of Sales & Credit Services. He was instrumental
in launching the Islamic Banking operations of Standard Chartered in Pakistan and was
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part of the core team for Islamic Banking project. He joins us from MCB, where he was
Executive Vice President – Credit & Risk Management Group, Pakistan.
Dr. Muhammad Qaseem (Head of Sharia)
Dr. Muhammad Qaseem is currently Country Head of Sharia Department of Dubai
Islamic Bank Pakistan. He has also served as a Sharia expert in the Sharia Structuring and
Coordination Department with Emirates Islamic Bank.
Dr. Qaseem holds a PhD in Tafseer and Quranic Sciences from the Faculty of Usul ud
Din of International Islamic University of Islamabad. Amongst his contributions is
“Islamic Banking: Points to Ponder” and translation, under the aegis of IIUI, a part of the
verdict of the Supreme Court of Pakistan, banning Riba as well as many other significant
articles on various topics especially in the field of Tafseer.
He has vast experience of teaching Islamic disciplines over a period of 18 years in B.A
and M.A programmes of International Islamic University Islamabad.
DIB SHARIA BOARD AND MEMBERS
Our Sharia Board members are widely acclaimed as leaders in the field of Islamic
Finance. A humble introduction to each member is given here.
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Dr. Hussain Hamid Hassan (Chairman and Sharia Advisor).
Dr. Muhammad Qaseem.
Dr. Ajil Jasimal Nashim.
ROLE OF SHARIA BOARD
DIBPL strives to bring to its customers, ‘World Class Banking, the Islamic Way’. To
ensure that every transaction complies with Islamic Law, we have in place a ‘Fatwa &
Sharia Supervision Board’, comprising of scholars of the highest repute, with vast
experience in the field of Islamic Jurisprudence, economics and banking.
The ‘Fatwa & Sharia Supervision Board’ ranks above the Board of Directors and is
empowered to issue ‘Fatwas’ on any matter proposed before it by the different business
units of the Bank. This framework has made DIBPL an organization that practices
Islamic finance in true letter and spirit.
Important duties of sharia board
It is the source of expert knowledge on Islamic Principles (Including Fatwas).
It oversees the development of all products to ensure no Sharia repugnant feature
arises.
It analyses unprecedented situations not covered by fatwa, in the Bank’s
transactions to ensure Sharia compliance.
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It analyses contracts and agreements concerning the Bank’s transactions to ensure
Sharia compliance.
It ensures the immediate correction of breaches (if any) in compliance to Sharia.
It supervises Sharia training programmes for the Bank’s staff.
It prepares an annual report on the Bank’s balance sheet with respect to its Sharia
compliance
DIVISIONS AT DIB
FINANCE DIVISION
AUDIT DIVISION
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COMPLIANCE DIVISION
HR DIVISION
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IT DIVISION
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OPERATIONS DIVISION
TEAM ADMIN
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TREASURY DIVISION
DIB CORPORATE BANKING
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a. EXPORT ORIENTED BANKING
DIBPL offers a range of solutions to help you in your trade transactions. The Banks
rapidly expanding local network befittingly complements the extensive experience it has
acquired in managing correspondent relationships across the globe. Our Sales and Service
Outlets have the infrastructure in place to ensure that your documents are processed
accurately and in the fastest possible time. Our trade professionals look forward to
sharing with you their trade related knowledge.
Import Murabaha
Import Murabaha is a product, used to finance a commercial transaction which consists of
purchase by the Bank (generally through an undisclosed agent) the goods from the
foreign supplier and selling them to the customer after getting the title to and possession
of the goods. Murabaha financing is extended to all types of trade transactions i.e., under
Documentary Credits (LCs) and Documentary Collections.
Wakala Istithmar Facility
A unique structure tailor-made for the exporters of the country, the Wakala Istithmar
facility which has been developed under the direct guidance of Sharia to meet the
working capital requirements of exporters and local manufacturers speaks volumes about
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our Sharia expertise and edge in bringing new Sharia compliant products to the market
for promotion of Islamic banking and ridding those who desire Halal income from
interest-based financing. Through this facility DIBPL is able to finance the exporter
before shipment, be it in pre-manufacturing or post manufacturing scenarios.
Wakala cum Istisna Facility
Istisna is a contract for manufacturing or construction whereby the manufacturer sells to
the buyer, goods of specific description at a fixed price which the manufacturer shall
make from raw material of its own and deliver to the buyer at a future date.
Istisna cum Wakala is a two-leg short-term trade finance solution which enables a
manufacturer to fulfill his payment obligation under a documentary credit presentation
and allows time for the goods to be cleared, manufactured and stocked. Once the goods
are delivered to the buyer, the customer then sells the goods in its capacity as the agent of
the bank to creditworthy and trusted buyers and realizes the sale proceeds on behalf of
the Bank. Such finances are offered in conjunction with LCs to corporate customers
under Wakala Istisna facility.
Guarantee
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A guarantee is issued by DIBPL (the guarantor) on behalf of its customer (the applicant)
in favor of a third party (the beneficiary), for fulfillment of specifically defined
contractual or financial obligations of the applicant. If the obligations are not fulfilled by
the applicant the guarantor will pay up to a certain amount to the beneficiary on non-
performance of the obligations by the applicant. .
Exchange Regulations for Guarantees in Pakistan are governed under Chapter XIX of
Foreign Exchange Manual (FEM) of the State Bank of Pakistan. Internationally, (ISP-98)
International Standby Practices 1998 of International Chamber of Commerce (ICC)
Publication No.590 also apply.
b. INVESTMENT BANKING
With its team of seasoned professionals, DIBPL has become the Investment Bank of
choice for local and regional clients in a short span of time. We leverage our regional
expertise and local knowledge to create an efficient blend of solutions for our customers.
Driven by Sharia principles, we provide a mix of following services:
Project Finance.
Mergers & Acquisitions Advisory.
Privatization Advisory.
Real Estate Advisory.
Balance Sheet Restructuring.
Private Placements.
Syndications.
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Sukkuk Issuance.
DIBPL’s Investment Banking provide its clients with a unique combination of expertise
broad range of investment banking/financial services and access to top regional decision
makers. We derive strength from our team that has unrivalled experience in dealing with
the largest M&A, Advisory and Fundraising transactions in the country.
In the short span of less than one year, the Investment Banking has been instrumental in
attracting investment/interests from major groups from the UAE including:
Nakheel.
Al- Habtoor Group.
Dubai Properties.
Limitless.
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MY INTERNSHIP AT DUBAI ISLAMIC BANK
Internship is a perquisite for completion of MSc programme. So being student of MSc
(Islamic Banking & Finance), I joined DUBAI ISLAMIC BANK, BANK ROAD
BRANCH RAWALPINDI on 26, Jan 2009 and worked there as an internee tills 30th
March 2009.
During my 8 weeks internship I spent most of my time in sales and account opening
departments of the branch. It was really a unique experience due to which I learnt a lot
about banking. This page onwards the portion of assignment regarding the branch of my
internship starts. All this information is essence of my practical work at the branch, the
written material available at the branch and the official website of DUBAI ISLAMIC
BANK.
BREAKDOWN OF MY TIME AT DIB
Sales department 4 weeks
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Account opening Department/Operations 4 weeks
1. SALES DEPARTMENT.
Sales department offers following products and services.
PRODUCTS OFFERED BY DIB
DIBPL strives to bring to its customers, ‘World Class Banking, the Islamic Way’. To
ensure that every transaction complies with Islamic Law The bank aims to offer state-of-
the-art Islamic banking solutions, with world class products and services. The primary
Islamic banking products offered by DIB are:
1. HOME FINANCE
2. AUTO FINANCE
3. VISA DEBIT CARD
4. SAVING PLUS ACCOUNT
5. PRIORITY BANKING
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1. HOME FINANCE
Dubai Islamic Home Finance is the key to your dream home and we are eager to put this
key in your hands. Using the Musharaka cum Ijara model, the Bank enters into a
partnership with you and helps you in fulfilling your dream of owning a home quickly,
conveniently and in a fully Sharia compliant manner. Whether you want to buy, renovate
or simply transform your present home finance of any other bank, DIBPL would be the
best Sharia compliant alternative. Currently Dubai Islamic Home Finance is offering
three product variants:
Home Purchase.
Purchase of undivided share (Home Renovation).
Purchase of undivided share of property at other bank (Balance Transfer).
How its works
Our Relationship Officer will visit and help you complete the Home Finance
application form.
Once your application has been analyzed and approved you will receive an offer
letter stating the terms of offer and the amount DIBPL is willing to offer you as
finance.
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On completion of these steps the amount stated in the offer letter which is
DIBPL’s contribution towards Musharaka will be deposited by DIBPL to
Musharaka account.
Customer will be registered as the legal owner of the property at the local
registrar’s office.
Customer will then be required to lease DIBPL’s undivided share of the property
DIBPL for an agreed number of years.
After successful completion of Lease, DIBPL will sell its undivided share in the
house to you for a nominal price and the property will be transferred to your
name.
Features
There are so many reasons that make Dubai Islamic Home Finance the right choice!
100% Sharia Compliance
Financing of up to Rs. 30 million
Fastest processing time
Affordable monthly payment amount
Financing of up to 80% of your property value
Early & Partial settlement options as per the applicable terms
Eligibility
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1. Customer Eligibility Criteria
Pakistani National.
Age 23-65.
Minimum income of Rs.15,000.
Self-employed Businessmen/Professionals or Salaried individuals.
2. Property Eligibility Criteria
The qualifying property must be located in Cities (Karachi, Lahore, Islamabad,
Rawalpindi and Faisalabad) of Pakistan.
The minimum value of the property must be greater than Rs.800,000.
Documents required
Copy of primary applicant’s CNIC.
Copy of Co-partner’s CNIC, if necessary.
2 Passport Size Photographs.
Tax Returns.
Copy of Utility Bill.
Professional Degree (for self employed professionals only).
Salary Certificate/Proof of Profession.
Latest Salary Slip.
Bank statement of the last 12 months & Bank Certificate
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2. AUTO FINANCE
Dubai Islamic Auto Finance offers a world class auto finance facility that enables you to
get a car quickly, conveniently and in a fully Sharia compliant manner. Using Musharaka
cum Ijara model to finance your car, steer yourself towards peace of mind and fulfillment
of your desire. Some distinguishing features of dib auto finance are:
Free Tracker Device & Monitoring
All vehicles financed by DIBPL are installed with a Tracking device on Bank’s expense
by the top Tracking companies in Pakistan. Monitoring charges are also borne by the
Bank. .
Lowest Insurance/Takaful Rates
Guaranteed Lowest Insurance/Takaful rates compared to any other Bank.
.
Payment Advance Booking Cases
No monthly rental payments will be made by the customer before delivery of the car in
Advance booking cases.
Monthly Rental
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Tracker & monitoring charges are free of cost yet monthly rentals are competitive and
affordable as per industry standards.
Financing Amount
DIBPL will finance up to 85% of the car value.
Minimum financing: Rs.100, 000 0
Maximum financing: Rs.3, 000,000
Islamic Product
We provide fast and hassle free processing of application through a Sharia compliant
process.
Flexibility
New or Used Cars.
Local or Imported/Re-conditioned Cars.
Payment plan with tenure options ranging from 1-7 years.
Ready Delivery and Advance Booking.
Income clubbing option.
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3. VISA DEBIT CARD
Introducing the First Islamic Visa Debit Card in Pakistan
Globally Accepted Sharia Complaint Card. Open an account with us and get your Visa
Debit Card to start enjoying the following benefits!
Global Acceptance
The DIBPL Visa Debit Card is linked with the global Visa network allowing you to
access your account from over 24 million merchants and one million ATMs around the
globe. You also have the flexibility of using this card at all 1Link and MNET ATMs in
Pakistan giving you instant access to your bank account any time of the day or night.
Convenience
Using your Visa Debit Card is quicker than visiting a bank, safer than carrying cash and
easier than writing cheques. With your card you have your bank account in your pocket.
Unlimited number of Supplementary Cards
You can have an unlimited number of Supplementary Cards issued against Visa Debit
Card and have the freedom of giving supplementary cards to as many people as you wish.
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Your daily account and transaction limits will be shared between all cards that have been
issued against your bank account.
ATM Cash Withdrawal
Your Visa Debit Card allows you to withdraw up to Rs. 50,000 per day at any ATM
across Pakistan. You can also withdraw the equivalent amount in foreign currency at an
international ATM wherever the PLUS sign is displayed.
Funds Transfer across Accounts
You can use your Visa Debit Card to transfer funds across accounts. You daily limit for
this transaction is set at Rs. 300,000. .
Balance Inquiry
Your Visa Debit Card can be used to check your account balances an unlimited number
of times at any ATM in Pakistan or at over 1 million ATMs around the world!
Mini Statement
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You can check your account balance through a mini statement at DIBPL ATMs. This will
give you details of the last 5 transactions carried out on your card.
Global Customer Assistance Services
DIBPL Visa Debit Card users can receive global assistance 24 hours a day, 7 days a week
from VISA Global Customer Assistance Services (GCAS) while traveling overseas. This
service can be used for lost/stolen card reporting or any other urgent queries.
Zero Loss Liability
If your card is lost/stolen, immediately call us at Dubai Islamic Phone Banking on 111-
786-DIB (342) to report the loss/theft. Once you have reported the lost/theft to the bank,
we will bear the financial liability for any transactions conducted on your card after your
call.
4. SAVING PLUS
DIBPL gives you the means to “Save and Spend – The Islamic Way”. Benefit from easy
access to your savings, watch as your funds earn you healthy profits & enjoy complete
peace of mind that comes from knowing that the profit earned is 100% “Halal”.
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It is a special savings account which allows customers to earn higher profit on higher
balances. Savings Plus is an ideal avenue for investment for SME’s, Institutions &
individuals that have high liquidity. .
The Saving plus Account is being offered in Pak Rupees Only.
Features of saving account
Profits will be calculated on the average balance of each month.
Profit will be paid on monthly basis.
Profit earning potential increases as the Account Holders balance rises. The
higher the Saving Plus deposit tier, the higher is the expected profit rate.
Following are the Saving Plus tiers (subject to change based on market
dynamics).
Rs. 1 million to Rs.4.99 million.
Rs. 5 million to Rs.9.99 million.
Rs. 10 million to Rs.24.99 million.
Rs. 25 million to Rs.49.99 million.
Rs. 50 million to Rs.99.99 million.
Greater than Rs.100 million.
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No restriction on deposits and withdrawals (Note: Rs. 1,000,000 needed to share
monthly profits).
Standing instructions options for payment of bills (utilities) and other periodical
payments.
Six monthly FREE account statements.
Entitlement to ATM/VISA Debit Card Facilities.
Internet Banking Facility available.
Account opening possible with a minimum of Rs.1 million.
24/7 Call Center with complete tele-banking services.
Account accessible through all Dubai Islamic branches.
How to calculate profit of an account for a particular period?
The formula used in this regard is mentioned below:
Steps involved in Formula:
.Calculate the average balance of the account
.Apply the rate of profit according to historical rate sheet (attached below) let
suppose 6.02 percent on the average balance calculated according to formula as
mentioned below.
Formula:
6.02/ 100 * 30/ 365 * average balance = profit for the period
Example:
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Date Narration Debit Credit Balance
01- Sep- 2007 Opening Balance 146,046,110
15- Sep- 2007 Profit~~~ For The Month Of Aug 51,869.58
30- Sep- 2007 Closing Balance 168,445,504
Step I:
Average balance = Opening balance + Closing balance/ 30
= 146,046,110 + 168,445,504/ 30
= 10,483,054
Step II:
Profit for August = 6.02/100 * 30/365 * 10,483,054
= 51,869.58
5. PRIORITY BANKING
We welcome you to our Dubai Lounge – Priority Banking, where a world of luxury,
convenience and financial innovation awaits you. Here bring you an array of specialized
products & services to fulfill all your financial needs.
Our special investment products and financial advisory service ensure that you are not
left dissatisfied. Enjoy the pleasure of Priority Banking with 100% Sharia compliant
banking facilities.
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Current Account
A Halal Current Account that is designed to fulfill your banking needs with Online
Branch network. .
We have the convenient options you desire:
Unlimited deposits and withdrawals in the currency of your choice.
Speedy, convenient transactions
Free VISA ATM/Debit Card.
Free from Riba as the deposits shall be used by the bank in Sharia compliant
transactions
Savings Account
Save the Islamic way, helping you save your own way:
Earn great monthly returns on investments based on principles of Mudaraba.
Halal profit with the convenience of a checking account.
Profit payment options as per your requirement.
Savings plus Account
The more you save, the higher profits you earn. With our Saving Plus Account you get
greater savings, and higher profits
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Higher savings bring higher rate of return.
Halal profit on the basis of Mudaraba with the convenience of a checking account.
Profit payment options as per your requirement.
Fixed Deposit
At DIBPL, Fixed Deposits work under the principles of Mudaraba, here an account
holder authorizes the Bank to invest its funds on basis of an unrestricted Mudaraba
contract according to principles of Islamic Sharia.
Avail our Fixed Deposit facility to earn Halal returns on your investments.
Our Fixed Deposit gives you the benefit of exceptional returns with flexible profit
payment options with the tenure ranging from 1 month to 5 years.
Enjoy the privilege of profit payment options- Monthly, Quarterly and on
Maturity.
All investments are on Mudaraba basis.
Automatic renewal of investment at maturity is available.
Acceptable as collateral for various banking facilities.
Dedicated Relationship Managers (RM’s) and Customer Relationship Officers
(CROs)
We at the, Dubai Lounge – Priority Banking, believe in dedicated services for our
customers. Our personalized services that are bound to delight you:
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Devoted RMs and CROs provide you with the world class banking service
catering to your financial needs.
Quick turn-around time & separate teller area.
The Dubai Lounge – Priority Banking we set new standards to save your precious time
and effort. Our separate teller area offers all the regular services, but in optimal time and
complete privacy.
Need a pay order in 5 minutes, we will ensure to deliver in less than 5 minutes.
Our Lounge’s are designed with a separate teller area, catering to all transactions
within minimum time.
Dubai Lounge - VISA ATM/Debit card
The First Islamic Bank of the World brings you the First Islamic VISA ATM/Debit Card
in Pakistan benefit from round the clock access to your Current, Saving or Saving Plus
accounts globally.
Enjoy the privilege of higher ATM withdrawal limits(Up to PKR 100,000)
Access over one million ATMs globally.
Preferred Access to all DIBPL branches
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Lounge – VISA ATM/Debit Card gives you access to all branches of DIBPL as well as
all Dubai Lounges in Pakistan this privilege and enjoy the Dubai Lounge – Priority
Banking experience.
SERVICES OFFERED AT DIB
DIBPL strives to bring to its customers, ‘World Class Banking, the Islamic Way’. To
ensure that every transaction complies with Islamic Law The bank aims to offer state-of-
the-art Islamic banking solutions, with world class products and services. The primary
Islamic banking services offered by DIB are:
1. Internet banking
2. Phone banking
3. Lockers
4. Problems Resolution Unit
1. INTERNET BANKING
No more waiting in queues. No worrying about bank timings either, because now, DIBPL
brings banking services to your doorstep. Free yourself from every hassle with our new
Internet banking facility. At DIBPL, we make sure you spend less time banking and more
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time enjoying life! Enjoy instant access to your account funds, from anywhere in the
world and at anytime of the day.
Features
Account Related
View your balance summary. Know where things stand with a glance at the
figures!
View your Account Statements. You can view them online, download them or
email to your account.
View status of Processed and Pending Cheques.
Open new accounts.
Open Fixed Deposit Accounts.
Order new ATM/Visa Debit Card.
Fund Transfers and Payments
Transfer funds between your accounts with DIBPL.
Transfer funds to another DIBPL customer.
Foreign Currency Transfer.
Demand Drafts and Cheques
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Have Pay Orders and Demand Drafts made.
Order Cheque Books.
Block Cheques that you have issued.
Request opening of new Accounts.
Request for new Visa Debit Card.
Apply for Fixed Deposit Accounts.
Issue standing instructions.
View Consumer Finance payment history and next installment due date.
Customer Services
Change PIN
Lodge Complaints and View the status of your complaint.
Set personal daily and monthly online transaction limits.
View Internet Banking Session summary and Internet Banking Account Activity.
Personalized home page and internal pages
2. PHONE BANKING
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DIBPL has setup a state-of-the art 24/7 Phone Banking Unit where we do our best to
provide quality services and financial solutions for our esteemed customers. Our highly
trained Phone Banking Officers are available 24/7 to assist and provide you the following
services:
Account Queries.
Balance Inquiry.
Address & Contact Number Change.
ATM Visa Debit Card Activation.
Card Cancellation.
Damaged Card Replacement.
Lost / Stolen Card Replacement.
Name Correction (ATM / Debit Card).
Personal Data Correction.
ATM PIN Regeneration.
Statement Generation.
3. LOCKERS
DIBPL is pleased to offer locker services to its customers. Our customers can lease a
locker for the safekeeping of their valuables for complete peace of mind.
Who is Eligible?
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Lockers will only be provided to account holders of DIBPL.
Locker will be available to individual account holders only and will not be
available for companies whether public or private, sole proprietorship, trusts,
clubs and other organizations.
The locker customer should meet the minimum average balance requirement of
Rs. 250,000 or above in his/her account for acquiring a locker. No locker will be
leased to a customer maintaining an average account balance of less than Rs.
250,000.
A maximum of 4 people will be allowed to operate the locker; one of these
operators must be an account holder. However, anyone can operate the locker
independently.
Minors would not be allowed to co-operate the locker.
Locker lease facility will be made available on first come first served basis.
4. PROBLEM RESOLUTION UNIT
DIBPL is fully committed in providing a World Class experience to its Customers.
However, we need your support to further improve our services. If you come across any
problem or query, have a complaint or a suggestion; please inform us through any of the
followingcontactchannels:
WriteUs:
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Problem Resolution Unit 3rd Floor, Karim Chambers, CL-5, 6/2, Civil Lines, Karachi.
FaxUs:
ProblemResolution:(021)-5694515
EmailUs:
OnlineFeedbackForm:
You can fill out our online feed back form by clicking
Please provide us the following information, in order to reply to you promptly.
Date.
Full Name.
Branch Name.
A/C Number.
Postal Address.
Phone number.
Fax number.
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E-mail address.
Rest assured your problems and complaints will be swiftly and efficiently resolved
because at DIBPL your satisfaction is very important to us.
2. OPERATIONS
This department can be further divided into three different sections, which are enlisted
and explained below.
1. Account opening
2. Cash
3. Clearing
1. ACCOUNT OPENING DEPARTMENT
WHO CAN OPEN ACCOUNT IN DUBAI ISLAMIC BANK
Any Pakistani whether resident or overseas, Muslim or Non-Muslim can open an account
with Dubai Islamic Bank to enjoy world class Islamic banking services.
PRE-REQUISITES FOR ACCOUNT OPENING IN DIB
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As a part of Know Your Customer KYC policy followed by Dubai Islamic Bank there are
five pre-requisites for opening an account which are:
Copy of original CNIC.
SBP Internal List
NAB Watch List
NADRA Verisys
World watch
(All the documents attached at the end of assignment)
TYPES OF ACCOUNTS
Individual Accounts
Joint Accounts
Minor Account
Sole Proprietorship Accounts
Illiterate Customer Account/Photo Account
Partnership Accounts
Limited Liability Companies Accounts
Associations, Committee, Societies or Club Accounts etc.
Non-Resident Rupees Account
Trust Accounts (with prior permission from HO)
Executers, Administers Accounts (with prior permission from HO)
Local Bodies Accounts
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Special Convertible Rupees Account (SCRA)
Staff Accounts
Current Account
Saving Account
Term Deposit
FACTORS GOVERNING THE OPENING OF ACCOUNTS
Following factors need to be given due consideration prior to the establishment of a
relationship between the DIB and the customer The suitability of the prospective
customer to maintain and conduct a Banking relationship. The Customer is person or an
entity that he / it claim to be that the proposed relationship does not violate
SBP Rules and Regulations
Any of the local law
The Bank’s own policy
The prospective profitability of the relationship at least in the long – term.
SUITABILITY OF PROSPECTIVE CUSTOMER AND INTRODUCTION.
Determination of the suitability of a prospective customer is a subjective assessment.
Banks invariably achieve this objective by requesting their Customers. When the
relationship is first established, to furnish a suitable introduction from:
Another customer of the Bank who is of good standing
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A Branch of DIB where the customer already maintains an account.
Another Bank.
A good form of verification of identity is by way of personal introduction from a known
and respected existing customer. Staff may introduce an account only if the customer is
well known to him this fact must be documented on Account Opening Form AOF and
thank you letter, as confirmation of introduction is not required in such cases.
While accepting Introduction for opening of new accounts, including accounts of Limited
Concern and Corporate Bodies, through enquires must be made about the credential of
introducer and invariably record the full name, CNIC Number address and telephone
number etc, in accordance with the bank’s KYC Policy and State Bank of Pakistan’s
Prudential Regulation M-1 KYC.
Negligence in taking up references furnished by customers forfeits the statutory
protection provided by law to a Bank. The Bank will therefore, obtain references and
verify their genuineness.
When customer approaches branch for opening an account, staff concern should ensure
obtaining and confirming all information about customer i.e. full name of the client, the
current address and place of work, residence office telephone numbers and necessary
documents to support these information as well as the physical checking of the original
ID card and other documents as per policy keeping a copy thereof initiated by the account
opening officer under a “true copy of the original”/ further efforts should be made to ask
65
for the 2nd ID such as driving license, credit card or club/association membership card to
ascertain the true identity.
Introduction of Inoperative / Dormant, Illiterates account shell not be accepted. In a
similar manner an account holder maintaining an account in his / her own or in the same
of a Firm where he / she is a Proprietor or Partner should not introduce account of
another Firm where he/ she is also a Proprietor or Partner.
Customer service staff should make a courtesy (thank you) call on landline at the
telephone number provided in the account opening from to confirm the availability of
customer on these numbers. A confirmation to this should be documented at KYC form
with date and time and name of the person he/she spoke with.
In case if customer is not available on the address provided or not contactable at
telephone number then the account must be blocked immediately.
The Bank-Customer relationship begins as soon as an account is opened in the books of
the Bank. It is therefore extremely important that only those officers who are fully
conversant with the account opening and customer/client verification procedures are
assigned to this role.
Care should be exercised while verifying ‘admitting signatures on Account Opening
Form (AOF), Specimen Signature Cards (SSC) in accordance with the KYC policy of
Dubai Islamic Bank and SBP prudential Regulation M-1
CONTROL OF DOCUMENTATION
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At the time of opening of an account, due care must be carried out to ensure that all the
requisite documentation has been obtained and bears the account number allocated to the
relevant account.
It will be the responsibility of Manager Operation to ensure that all the requisite
documentation has been obtained and formalities complied with and the introduction
reference has been verified. Relationship Managers (RM’s) are responsible to inform the
client about the rules and regulations and the documents required for opening of account
with DIB to the customers market by them.
RM must also ensure the presence of customer at time of account opening along with all
required documents including the original CNIC.
All Account Opening documentation must be authenticated against original by officer in-
charge account opening/manager operations.
All changes affecting the conduct of the account and in authorized signatory of the
account must be amended in signature system as soon as possible.
The account opening documentation is held in account number order in the Vault under
dual custody of a Designated Officer and Manager Operation.
A request for change of Signatories should be made by the Customers in writing
supported by the relevant documentation required. The inclusion of new Signatory to
operate account of a Limited liability Company would require a supporting resolution
from the Board of Directors setting the extent of his authority etc.
A request for change in address or any other particular must be made in writing by the
Customer, duly signed and supported by necessary additional documents that may be
required.
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Any request by a Customer to effect a change in the style of signature must be treated
with great care and caution, particularly if is a sole account. The Customer should be
called to the Branch before the request is entertained and any change effected. After
positive identification of the Customer, the signatures taking on records must be admitted
by Manager Operation. In no case should such a request be entertained and given effect
to, through correspondence. In such cases, Specimen Signature Card duly approved must
be forwarded for signature capturing and updating the Customer database.
BASIC DOCUMENTATION
The basic Account Opening documents generally required to open and operate are
indicated in KYC policy circulated by operation department under reference Ops-
11/01/04 dated 13th Jan 04.
ACCOUNT OPENING FORM
It is to be ensured that AOF is completed in all its aspects and signed by all the clients in
the presence of a Bank Official.
Signature verification of Introducer on “AOF” will only be done by the designated
officer with his full signature. Alternatively, either BM or MO will verify introducer’s
signatures on AOF.
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No Officer of the Branch is authorized to verify signatures of Introducer on AOF, except
personnel authorized above. This practice will be followed throughout the Branches of
the Dubai Islamic Bank without any exception. .
AOF will be approved by the Manager Operation and Branch Manager jointly. In the
absence of any one of them, the First Signatory on AOF can be Officer in-Charge (OIC)
handling Account Opening. The combination will be as follows:
FIRST COMBINATION
First Signatory : OIC Account Opening
Second Signatory : Manager Operations
OR
SECOND COMBINATION
First Signatory : OIC Account Opening
Second Signatory : BM
However all account open during the absence of Branch Manager or Operation Manager
must be reviewed by them upon resumption of duty to ensure all formalities have been
completed.
SPECIMEN SIGNATURE CARDS
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Signatures will be admitted in person for all Account holders except in case of reputable
Limited Concern or Corporate Bodies, where restriction of signing SSC in person by
Account Holder(s) / Authorized Signatories will be relaxed.
OIC Account Opening will sign in full, against all the signatures on SSC and affix the
stamp of “Signatures Admitted” close to the signatures of the Account Holder /
Customer.
Blank spaces on SSC and blank areas surrounding the ‘Specimen Signature’ should be
blocked our with red ballpoint diagonal lines to prevent any additions after the Specimen
Signature has been admitted.
The SS Card must be sent for capturing of the signature into the system and once scanned
and verified in the system SSC will be filed with AOF in lockable fire resistant cabinets.
Manager Operation or any other official designated by Manager Operation will hold keys
of cabinets where the AOF/SS Cards are kept and access to AOF and SS cards will be
restricted to authorized personnel only.
It is to be ensured that whenever there is any change in signing authorities on the SSC
etc. a fresh SSC is obtained from Customer.
SS Cards, which are cancelled by virtue of reasons as above, will be appropriately
marked, initialed and dated by the designated officer and filed with the respective account
documentation along with the customer’s request and supporting documents.
NEW ACCOUNT OPENING AND AUTHORIZATION
The Branch will exercise maximum care while opening new accounts.
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Following should be ensured in this regard:
Account opening the account is active in the system. While authorized the opening of
account Manager Operation must ensure that all required documentation has been
obtained and formalities completed and the introduction reference has been verified.
All account open during the day must be counter signed by the Branch Manager as token
final approval for opening of account.
In cases where the formalities are in the process of completion, operations in the account
must be restricted by:
Withholding of cheque books
Withholding the grant of sage custody facilities or sage deposit lockers
Withholding the disbursement of proceeds of collection items. Particularly
clearing/collection cheques, PO, DD, travelers cheques and other similar
instrument
Cash withdrawals, transfer of funds even PO/DD insurance will not be allowed.
In order to prevent fraudulent references, independent confirmation will be obtained
regarding the genuine of the introduction furnished from the party providing such
references.
INDIVIDUAL ACCOUNT
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Accounts of Individuals, who are resident or non-resident, are to be opened under this
category
JOINT ACCOUNT
Joint Account is an account in the names of two or more persons (other than Partners or
Trustees). In this regard it to be ensured that:
The “Survivorship Mandate” is signed by all the parties to the account and
instructions for the operation of account are clearly stated and filled in the
Mandate.
In case of death, cheques signed by DESEASED Account Holder presented for
payment will not be entertained and therefore must be returned.
When the balance of Joint Account is repayable to either party or survivor, the
Specimen Signature Card should be marked to effect the arrangement.
Following should be ensured for the conduct of a Joint Account:
A person who has not attained the age of 18 years is minor. However, incase
Court has appointed a Guardian for the property of a Minor, and then the period
of his/her majority extends to the age of 21.
Title of Minors account should be on behalf of the minor in the name of parent /
Guardian i.e., “XYZ (Guardian) on behalf of ABC (Minor)” who will sign the
AOF and operate the account on behalf of a Minor. This will obviate the legal
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complications arising from dealing directly with a Minor. For this purpose
Account Opening formalities meant for “Joint Account” shall be adopted whereby
the full particular/details of Guardian as well as Minor must be filed in AOF
under applicant 1 and Applicant 2 respectively.
Branches must ensure that the very purpose of opening an Account for a Minor is
to save funds for the benefit of Minor. Frequent transaction especially
withdrawals are to be restricted to minimum. Accordingly issuance of Power of
attorney (mandate) in minor account is not allowed.
Care should be exercised in the operation of Minor Accounts to ensure that it is
always in credit since the Bank cannot resort legal action against the Minor in
respect of any overdraft that may arise in the account. As Minor cannot enter into
any kind of contact therefore, contracts entered into with a Minor will be void and
of no effect.
Minor shall not be allowed to operate on such accounts even after he / she has
attained the age of Majority. Upon attaining the age of Majority, the account of
Minor should be closed and a new account should be opened after the completion
of the relevant Account Opening procedures.
In order to keep track of minor attending the age of majority the date of birth of
minor be written on AOF and SS Card.
SOLE PROPRIETORSHIP
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A formally stamped written request on the official Letter Head of the Business /
Firm of the Sole Proprietor in order to open a Sole Proprietor Account must be
submitted along with AOF.
This request for opening of a Sole Proprietorship Account should comprise the
following clause:
“I am a Sole Proprietor of the Firm and as such, I am entirely responsible for all
transactions carried out in the name of the Firm and I am personally liable for any
Overdraft or other obligations arising in or in connection with this account and the
Bank is hereby authorized to debit the account with commission and / or other
Banking charges and expenses with this account”.
Additional care must be taken while opening of sole proprietor account. Beside
other documents the customer should be ask to produce the original NTN
certificate issued to his name in the capacity as sole proprietor of said firm.
Branch should make reasonable efforts to ensure that all documents are in order
and the person is the true sole proprietor of the firm.
While conducting KYC interview the nature of business, type of business and
detail of accounts with other bank must also be documented.
If customer is also maintaining an account with any of DIBL Branch the reference
to conduct of his account with DIBL Branch must be made.
ACCOUNT OF AN ILLITERATE PERSON
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In matter of Illiterate Customers Accounts, it should be ensured that the Customer’s both
hands thumbs impressions should be recorded / affixed on the SSC. Furthermore, the
Customer will be required to affix his thumb impression at back of his photograph as well
and this activity will be witnessed by two Authorized Officers of the Branch who will
certify by appending their signatures (at the back of the photograph) below the thumb
impression that photograph is of the particular person. Any other piece of personal
information that will help establish quite positive identification of the Customer will also
be recorded on the SSC.
The attested photograph may be attached with the SSC and the Manager Operation and
OIC Account Opening will duly attest the SSC in respect of all details. Furthermore, all
withdrawals undertaken by illiterate Customers must be witnessed by two Bank officials
and countersigned by Manager Operation.
It should further be ensured that:
Only Saving Accounts are opened for illiterate Customers.
At the time of Accounts are opened, photographs and thumb impression will be
attested by Manager Operations and a Designated Officer of Customer Service
Department.
Two latest passport size photographs of such Customer must be obtained and
pasted on AOF (photos should not be stapled) and SSC, duly attested by MO
under signature in the manner that part of his signature extends on to the AOF and
SSC, respectively.
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Illiterate Customers must attend the Bank personally along with the Cheque Book
for the withdrawals of funds from their account. It will be mandatory for such
Account Holder(s) to affix the thumb impression on cheque in the presence of
Manager Operation at the time of withdrawal.
PARTNERSHIP ACCOUNT
Partnership is an association of two or more persons who have agreed to share profits of a
business carried on by all or by any one of them acting for all. The terms and conditions
must be spelled out in the “Partnership Deed” formally agreed upon among Partners by
incorporating the same in the Deed.
It should be ensured that:
Accounts of only Registered Partnership concerns will be opened and the
“Partnership Deed” will be obtained and critically reviewed.
The AOF must be signed by all the Partners in their capacity as individuals and
not as member of the Partnership.
The signing and delegation of powers of those authorized to operate the account should
be clearly stated on the AOF documentation in accordance with Partnership Deed.
LIMITED LIABILITY COMPANIES ACCOUNTS
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There are two types of Limited Companies i.e., Public Limited and private Limited. The
Public and Private Limited Companies are both incorporated and governed under the
provisions of Companies 1984.
A Limited Liability Company may open an account with the Bank only if it is authorized
to do so by a resolution of the Board of Directors of the company. Furthermore, such
resolution must specify the titles / designation of the officials authorized to open and
operate the account, the extent of their authority and the manner in which the account will
be operated.
Following instructions must be followed in this regard:
The memorandum and Articles of Association should be critically reviewed to
ascertain that they authorize the business, Company is engaged in and that the
person empowered to act have been duly appointed in terms of the same. The
Memorandum is the constitution of a company and defines the borrowing powers
and the capital of the company at the time of formation, whereas, the Articles
defines the powers of the Directors.
In order to ascertain the powers of the Directors to open an account with Bank, to
borrow and to mortgage the company’s assets, to sign and endorse bills of
exchange etc, the Articles of Association must be critically examined. If these
powers are not clear, the concern should be inquired to explain the procedures that
have been adopted to regularize the position.
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Cheque Book or withdrawal from the account of newly floated Public Limited
Companies shall be allowed on production of a certified copy of the “Certificate
of Commencement Business” of the Company.
ASSOCIATION, COMMITTEE, SOCIETY OR CLUB ACCOUNTS
An Association, Committee, Society or Club may open an account with the Bank only if
authorized to do so by the Governing Body of the said Association / Committee, Society
or Club.
Account of the Association, Committee, Society or Club should not be allowed be
overdrawn. No cheques drawn on the accounts of Association, Committee, Society or
Club shall be collected for the credit of personal / private accounts of any of the Officer-
Bearers of Association, Committee, Society or Club.
NON – RESIDNET RUPEE ACCOUNT
Account of Individuals, Firms or Companies who are resident in countries outside
Pakistan and all national of Pakistan and persons domiciled in Pakistan, who visit abroad
for the purpose of employment study and business etc., are treated as Non – residents as
long as they remain outside Pakistan.
Accounts of all foreign nationals who are resident in Pakistan may be treated as resident
Accounts.
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It is to be further ensured that:
New Non – resident Accounts in the names of persons or firms or companies may
be opened if funds received therein are from abroad through banking channel.
Joint Accounts of Residents and Non-residents will be treated as Non-Resident
Accounts irrespective of the fact whether the accounts are to be operated solely or
jointly by them.
All transactions in Non-resident Accounts are restricted to certain specific
purpose enumerated in Foreign Exchange – Manual Chapter VIII.
Debits and credits to these accounts must be supported by “Form A – 7”
Foreign nationals who are resident in Pakistan must sign Form QA - 22 in
duplicated and forward a copy to the SBP for their records, however Form QA –
22 will not be required in case of Non – residents.
Moreover, following documents should also be obtained: Attested copy of first four (4)
pages of the passport and the page on which work permit / resident visa is endorsed for
the inspection of SBP Inspection Team.
KTC Form (to be completed by the Account Opening Officer while conducting
Customer’s Due – Diligence KYC interview)
TRUST ACCOUNTS
A Trust Account may be opened exceptionally with the prior approval of Head of
Operations. Trust account may only be open for parties whose integrity and standing is
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beyond any doubt. Before sending the to HO, BM and MO will go through the “Trust
Deed” to ensure that no undue onus is placed on the Bank.
It is to be noted that DIBL will not as a rule open accounts for Trust as the operation of
Trust Accounts place undue responsibility on the Bank. BM / MO have to ensure that all
transactions taking place are consistent with the terms of the Trust and reference may
need to be made to the terms of the Trust and before authorizing every payment, to
ensure its correctness.
It will be the responsibility of the BM / MO to ensure that all the details of the business
and the inflow of the expected deposit through Trust Account ate extensively disclosed,
before referring the case to the HO. It is also the responsibly of BM and MO to carefully
study the “Trust Deed” and ensure that operation of Trust Account will not place undue
responsibility on the Bank.
Following points should however be kept in mind:
AOF should preferably be signed by All Trustees
Withdrawals from the account shall be allowed to Trustees as mentioned in the
“Trust Deed’ under their joint signatures unless trustees are given powers to
operate the account individually.
AOF, SSC etc, should be boldly marked “TRUST ACCOUNT”
Cheques or other instruments should not be collected for credit of any Trustee’s
private account
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It must be noted that the Trustees do not have any authority to delegate their
function to anyone else unless so stated in the “Trust Deed” all Trustees must sign
instruction on the account i.e., cheques, letter regarding instructions to the Bank
etc.
Specific instructions given by the HO, from time to time, should be followed.
EXECUTORS AND ADMINISTRATATORS ACCOUNTS
Executors and Administrators Accounts shall only be opened with the prior permission
from the HO. Moreover, whenever application for the opening of Executors and
Administrators account is received, the matter should be referred to the Regional
Manager who will forward the full details of the matter to HO for guidance and
permission to open such account.
All Executors and Administrators will be required to sign the AOF and SSC. Signed
instructions will have to be obtained from all Executors and Administrator stating who
will operate the account. The delegation of powers to any third party will not be accepted
under any circumstances.
In the operation instructions are REVOKED by any of the Executors or Administrators,
further operations will only be allowed under the joint signatures of the Executors and
Administrator. No Executor and Administrator will be allowed to transfer the fund from
the account to their personal accounts.
LOCAL BODIES ACCOUNTS
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City Governments, Municipalities, District Boards, Development Bodies etc are included
in Local bodies. Functions and powers of these Local Bodies are governed by the
relevant Local Acts and Rules / Bye-laws made in accordance with such Act.
These Local Bodies are regarded as desirable Customers because they have substantial
amount of funds at their disposal. However, operations on these accounts must be
conducted strictly in accordance with the statutory rules and regulations.
It is further to be ensured that:-
Banking transactions regarding these Local Bodies Accounts must always be
consistent with the Rules and Bye-laws and within the scope of the Trustees
(Local Authorities) of the funds and their respective authority.
A resolution is to be obtained from the Local Authority, passed by its Governing
Body / Managing Committee in accordance with the constitution of the Local
Body.
SPECIAL CONVERTIBLE RUPEES ACCOUT (SCRA)
As per the Foreign Exchange Manuel Chapter -20, SCRA can be open by Non-residents
for the purpose to trade in the shares quoted on the Stock Exchanges in Pakistan. Such
accounts can be fed by remittances from abroad or by transfer from a foreign from a
foreign currency account maintained by the non-resident investor in Pakistan. The
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balance available therein can be used for purchase of any share quoted on the Stock
Exchange.
All payment for such purchase will be debited to the account on production of stock
broker’s memo showing sale of shares to the account holder and disinvestments proceeds
may be credited provided evidence of the sale price in the shape of stock broker’s memo
is produced. .
These accounts can also be credited with dividend income against the share purchased
through SCRA accounts. Transfers from SCRA account. Transfer from one such account
to another may also be made in case of transfer of shares between the two account-
holders .
Branches will be required to submit weekly statement in the prescribed Performa (V-92)
of FE- Manual showing the position in respect of SCRA accounts as on each Saturday.
STAFF ACCOUNT
Staffs can open only one saving or current singly or jointly with his / her spouse at the
time of appointment in the respective branch of Dubai Islamic Bank Limited. The
account will be opened for the purpose of salary disbursement (like salary, bonus,
increments, allowance or any form of reimbursement from Dubai Islamic Bank Limited
against services rendered by employee). In case of permanent transfer of staff member
from one branch to another branch, his / her salary account must be transferred to his /
her place of posting. HR shall advise his previous unit to close his/her salary account and
to new unit for new account.
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Staff member will not open any account either sole or joint in any other branch without
the prior permission of Head of Operations and Head of Human Resources. However,
he/she may open only one additional account in his/her own branch singly or jointly for
genuine reason and with prior approval of Branch Manager.
Staff members are not allowed to hold mandate in any account. Only one account (staff
salary account) will be established under the preferential rates.
Any credit (other than salary, bonus loan from DIBL) of Rs. 10,000/- and above in staff
account should be approved by the Branch Manger or respective Department Head in
case of Head Officer on monthly basis, Branch Manager/Department Head should review
the transaction of Staff account and seek clarification of any unapproved credit in the
account. Evidence of such review i.e. justification from staff, Branch
Manager/Department Head comments etc, must be documented in the report for audit
review.
In case of staff resignation, HR should communicate the same to respective branch for
change of account status as regular customer before giving the final clearance to staff.
All rules for inoperative and dormant shall be applicable after the change of account
status as regular customer, thus also attract bank’s charges as per bank’s schedule of
charges.
Senior staff who have opened staff accounts for the drives who are no longer in their
service such accounts must also be closed with immediate effect.
Current Account
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Based on the Wadia contract the Current Account offers users safe keeping of their cash
deposits against the Bank’s guarantee to provide the depositor his funds on demand.
However the depositor permits DIBPL to use or invest his money in its Sharia compliant
investments and the Bank bears all risks related to the use or investment of those funds.
Hence, the Current Account is neither entitled to investment profit nor does it bear any
risk.
The Current Account is offered in the following currencies:
Pak Rupees
US Dollar
UK Pound
EURO
Japanese Yen
The Current Account can be opened with as low as PKR 1000. In case of Foreign
Currency Account, the Bank shall determine the minimum level from time to time.
Features
No entitlement to profit nor any liability for sharing any loss
No restrictions on withdrawal (subject to sufficient credit balance, and the
regulatory restrictions applicable to Foreign Currency Account)
No minimum balance restriction
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Standing instructions option for payment of bills (utilities) and other periodical
payments
Six monthly FREE account statement
Entitlement to ATM/VISA Debit Card Facilities
Internet Banking Facility available
24/7 Call Center with complete tele-banking services
Account accessible through all Dubai Islamic branches
SAVING ACCOUNT
More flexible. More convenient. More innovative. The Dubai Islamic Savings Account is
truly all you'll ever need. It is an all-in-one account designed to meet all your financial
needs. Round the clock, convenient access to your funds, Halal profits and World Class
services!
By providing your funds through the Dubai Islamic Savings Account you authorize the
Bank (Investment Manager) to invest your funds on the basis of unrestricted Mudaraba
contract according to the principles of Sharia. Profits earned are shared on the basis of
investmentproportion.
The Savings Account is offered in:
Pak Rupees
US Dollar
UK Pound
EURO
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Japanese Yen
The Savings Account can be opened with as low as PKR 1,000. In case of Foreign
Currency Account, the Bank shall determine the minimum level from time to time. The
Savings Account entitles its holder to a share of the Mudarba pools profit as long as its
deposits remain above the minimum balance requirements for the account.
Features
There are three deposit tiers for this account: Up to Rs. 25,000 Rs.25K to Rs.
100,000 Greater than Rs. 100,000
Monthly profit sharing on Mudaraba basis.
Unlimited number of withdrawals.
No minimum balance restriction, but the balance shall not participate in the profit
if deposit falls below Rs. 25,000.
Standing instructions option for payment of bills (utilities) and other periodical
payments.
Six monthly FREE account statements.
Entitlement to ATM/VISA Debit Card Facilities.
Internet Banking Facility available.
24/7 Call Center with complete tele-banking services.
Account accessible through all Dubai Islamic branches
SAVING PLUS ACCOUNT
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DIBPL gives you the means to “Save and Spend – The Islamic Way”. Benefit from easy
access to your savings, watch as your funds earn you healthy profits & enjoy complete
peace of mind that comes from knowing that the profit earned is 100% “Halal”.
It is a special savings account which allows customers to earn higher profit on higher
balances. Savings Plus is an ideal avenue for investment for SME’s, Institutions &
individuals that have high liquidity. The Saving plus Account is being offered in Pak
Rupees Only.
Features
Profits will be calculated on the average balance of each month.
Profit will be paid on monthly basis.
Profit earning potential increases as the Account Holders balance rises. The
higher the Saving Plus deposit tier, the higher is the expected profit rate.
Following are the Saving Plus tiers (subject to change based on market
dynamics).
Rs. 1 million to Rs.4.99 million.
Rs. 5 million to Rs.9.99 million.
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Rs. 10 million to Rs.24.99 million.
Rs. 25 million to Rs.49.99 million.
Rs. 50 million to Rs.99.99 million.
Greater than Rs.100 million.
No restriction on deposits and withdrawals (Note: Rs. 1,000,000 needed to share
monthly profits).
Standing instructions options for payment of bills (utilities) and other periodical
payments.
Six monthly FREE account statements.
Entitlement to ATM/VISA Debit Card Facilities.
Internet Banking Facility available.
Account opening possible with a minimum of Rs.1 million.
24/7 Call Center with complete tele-banking services.
Account accessible through all Dubai Islamic branches.
TERM DEPOSIT ACCOUNT (TDR)
Looking for investments with an excellent mix of short and long term goals? One that
offers the potential to earn high returns the Islamic way? Well, look no further, our Dubai
Islamic products are the wise financial decision you need to make.
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By investing in the Dubai Islamic Fixed Deposit Account the Account Holder (fund
provider) authorizes the Bank (Investment Manager) to invest his funds on the basis of
unrestricted Mudaraba contract under the principles of Sharia. The Bank invests these
deposits in its common pool with other deposits and the shareholders’ equity. The net
profit on the common pool is distributed amongst the shareholders and depositors, taking
into consideration the tenor, amount of the deposit and profit payment frequency for the
account.
At Present the Account Holders have the option of investing in Pak Rupees Only.
The following table lists the various investment options available to the customer:
Tenors Monthly
profit
payment
Quarterly profit payment Profit at maturity
1 Month NA NA Available
3 Month NA NA Available
6 Month NA NA Available
1 year Available Available Available
2 years Available Available Available
3 years Available Available Available
5 years Available Available Available
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Features
Investment portfolio can be viewed over the internet using Dubai Islamic Internet
Banking service.
Minimum investment amount as low as Pak Rs.100,000/-.
Available in tenors of 1, 3, 6 months or 1, 2, 3, 5 years.
Profit frequency options are monthly or quarterly or semi-annually, annually or at
maturity.
Pre-mature withdrawal options shall be at the discretion of the Bank. In case of
such a premature encashment, profit shall be recalculated/adjusted on the basis of
the weight age of the tier for which the deposit has remained in the Bank.
Certificates can be encashed at maturity from any branch of DIBPL across
Pakistan.
24/7 Call Center with complete Tele-banking services.
Acceptable as Collateral for other Banking Facilities.
Profit sharing on Mudaraba basis within the Common Mudaraba Pool with weight
age points allocated on the basis of tenor, amount limit and profit payment
frequency.
Account Holder bears loss in proportion to its investment in the Mudaraba Pool.
Account Holder can give standing instruction for re-investment or roll-over of
investment for the next applicable period.
Six monthly FREE account statements.
Statement of Account Holder’s deposits can be viewed over the internet as well.
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PROCEDURE FOR OPENING OF NEW ACCOUNTS
Following are the Account Opening Procedures:
First step for opening a new account will be the verification of the Introducer of new
account. The Introducer should preferably be an existing Account Holder of the Bank /
Branch. During verification of the Introducer, Relationship Manager (RM) at Front
Officer will further ensure that:
While accepting Introduction for opening of new accounts, thorough enquires will be
made about the credential of introducer and invariably record the full details i.e. name,
NIC Number, address and telephone number etc in AOF.
Accounts Holders whose accounts are Inoperative / Dormant cannot introduce any new
account.
An Account Holder maintaining an account in his / her own or in the name of Firm where
he / she is Proprietor or Partner should not introduce account of another Firm where he /
she is also a Proprietor Partner.
DIBL permanent staff may introduce accounts only for those persons who are personally
known to them.
RM will furnish a complete set of AOF after ascertaining the requirement of the
Customer along with other relevant documents, forms and letters etc to the Customer.
Customer will be facilitated by the RM in filling the AOF and provide clarifications and
necessary assistance if required by the Customer, for opening of account.
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The Customer will sign the AOF, in the presence RM of the Branch.
It will be RM’s responsibility to review the AOF and underlying documents and ensure
that the AOF is duly completed in all respects.
The AOF along with relevant documents then be forwarded to OIC Customer Service.
A copy of the CNIC of the Customer will be attested by OIC Account Opening or
Manger Operation of the Branch who will sign the same after having it compared with
the original CNIC and writing “Original Seen” on the copy as evidence.
RM will ensure that all requirements for opening of new account have been fulfilled and
AOF is completed against all the signatures given in the AOF and SSC and affix the
stamp of ‘Signature Admitted’ near the specimen signatures of the Account Holder /
Customer and sign in full. RM will also verify the signature of the Introducer and affix
the stamp of ‘Signature Verified’ and will and send the AOF to Manger Operation for
approval.
MO will ensure that all the requirements for Account Opening have been met and the
style of signatures of Account Holder(s) on the AOF and SSC are identical, signature of
introducer are verified and customer signature on SSC are admitted by a designated
officer. MO will then sign in full on the AOF authorizing opening of account. MO will
also approve the KYC signing in full.
Once the above formalities are duly completed, RM will obtain Account Number from
the System and note it down on the AOF, SSC, KYC and all other relevant underlying
documents.
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RM will then key – in the data of the new Account Holder(s) in the system and new
account transaction will be saved in the system.
RM will print new account profile and hand over all forms and underlying documents to
the MO for authorization and supervision in the system.
MO will scrutinize AOF and all underlying documents and compare the same with the
information loaded by the RM in the ‘Islamic Banker’ System by retrieving the Account
Opening data i.e., name of the Customer, title of account, CNIC number and SBP’s
Depositor’s Code etc. in the ‘Islamic Banker’ System. MO will documentation and
accuracy of the transaction in the System, MO will authorize / supervise the same and the
new account will become operative .
The RM will then supply the deposit slip along with the account number to the Account
Holder to make the ‘Initial Deposit’
RM will ensure that the ‘Letter of Thanks’ on the Bank’s format has been sent to the new
Account Holder through registered post / courier/ this precaution would not only
accomplish the purpose of confirming his / her address but also notify the Account
Holder that an account has been opened in his / her name. A copy of this letter along with
courier receipt will be placed with the relevant AOF.
A similar thank your letter will be sent to introducer as confirmation/notification that an
account has been introduced by him.
Next morning, Manager Operation will review ‘Account Opened List’ Produced by the
IB system of the accounts opened during the previous day and ensure that only approved
accounts have been opened in the system.
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MO will send this ‘Account Opened List’ along with all AOF for the review of BM for
his review and signatures.
Branch Manager will review all account opened previous day and will further ensure that:
AOF has been completely filled-in and no mandatory field is left blank
Any field which is not applicable is crossed or marked ‘N/A’
Required documents, letters and forms according to the type of Account are duly
attached along with the AOF, in accordance with the requirements specified in
relevant sections.
Attested copy(s) of CNIC(s) of Account Holder(s) is attached with the AOF
Introducer’s signatures are verified and ‘Signature Verified’ stamp is affixed
Signature(s) on SSC are duly admitted by MO and stamp affixed after placing
signatures
AOF is signed by OIC RM as first and MO as second signatory
KYC Form duly filled and checked and signed by MO.
Once satisfied BM will counter sign the AOF as an evidence of having reviewed all
account opened.
INITIAL DEPOSIT
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Initial Deposit must be in CASH. Cheques may only be accepted as Initial Deposit in
case of reputable sound parties and on personal responsibility of Branch Manager. In all
such cases, the Cheque when tendered should be crossed by the Account Holder /
Customer before being lodged for collection. Cheque Book should be issued after the
proceed of crossed Cheque has been actually realized and all KYC formalities have been
completed. .
SIMILAR ACCOUNT
In case of business account, RM shall ascertain from the List of existing Accounts in IB
system that the title of new Account is not similar to any other account opened earlier.
CHANGE OF ADDRESS
A request for the change of address must be obtained in writing from customer. Before
changing the address in the system RM must ensure to obtain approved from Manager
Operation or Branch Manager. A thank you letter must be sent to customer’s new address
to accomplish and confirm his/her availability on new address.
Whenever a request for the changes of residential change address is received Branch
must also obtain customer new telephone number as in most of the cases the residence
telephone will also change unless the change of address is in same locality.
CHANGE IN NATURE OF ACCOUNT
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Once an account is opened, regardless of the type of account, the same cannot be and
should not be altered/charges later.
The type of an account opened in Individual’s name CANNOT be later converted to Joint
Account by adding the name of another person on the AOF and nor the nature of account
opened as Current Account can be later changed to PLS Saving Account.
If a change is desired, the Account Holder should be advised to close the account and
open a fresh account. Branches are therefore, advised to ensure that no changes are made
in the nature of account, under any circumstances.
Any such change, if brought in the notice of management or highlighted during the audit,
will be a ground for disciplinary action.
SAFE CUSTODY OF AOF ACCOUNT OPENING DOCUMENTS
Account Opening Forms and underlying relevant documents relating to all type of
accounts should be kept under the joint custody of the MO and OIC Customer Service, as
the case may be, and must be placed in the strong room or in a fireproof cabinet
NOTE
In case the ‘Letter of Thanks’ is returned undelivered, caution will be exercised and the
account will immediately be blocked till the reasons for the same are received from the
Account Holder / Customer. .
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Closure of an account:
Account holder upon written request or on prescribed form of the bank can close his/her
account. He may or may not mention the reason of closure of account; signatures are
verified from the SS Card. The number of unused Cheques shall be noted on the
application form attached below. The balance available paid by the bank through pay
order/slip prepared in favor of account holder. DIB charges Rs.200 as account closure
charges.
2. Cash Department:
Here, discussion is about deposits and withdrawal arrangements of bank. Particularly
about accounting treatment of different types of cash movements. It includes the entries
of teller at the time of opening and closing of the day and the amounts present in the safe
at opening and closing of the period. These accounting treatments have been shown in the
form of accounting entries along with explanation in the following lines.
Opening of the day (Balance position):
Strong room Dr. Rs. 5,000,000
Transaction # 1:
Given to the teller (For whole day transactions) Cr. Rs. 40,000
Balance amount Dr. Rs. 4, 600,000
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Accounting entry (By bank):
Teller A/C Dr. Rs. 400, 000
Cash in safe A/C Cr. Rs. 400, 000
Transaction # 2:
Additional deposit with teller Dr. Rs. 200, 000
Withdrawal Cr. Rs. 500, 000
Balance amount Cr. Rs. 300, 000
Accounting entry when cash received (By teller):
Bank A/C Dr. Rs.200, 000
Customer A/C Cr. Rs.200, 000
Accounting entry when cash paid (By teller):
Customer A/C Dr. Rs.500, 000
Bank A/C Cr. Rs.500, 000
Closing of the day (Balance position):
Strong room Dr. Rs.3, 600,000
Transaction # 3:
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Additional payment made to the teller Cr. Rs. 300,000
Balance amount Dr. Rs.3, 300,000
Accounting entry (By bank):
Cash in safe A/C Dr. Rs.3, 300,000
Teller A/C Cr. Rs.3, 300,000
3. Clearing Department:
In order to understand the clearing of Cheques we have to see first that how many types
of Cheques are there used in by the customers of different types of banks. A banker in
Pakistan normally deals with only two types of cheques:
OPEN CHEQUES
They are payable in cash at the counters of a banker in accordance with the practice of
the bankers. It can be order or bearer cheque.
CROSSED CHEQUES
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They are not payable in cash at the counter of a banker, but can be collected by only the
banker who would credit the proceeds to his customer’s account after realization.
Example:
There are two parties ‘X’ and ‘Y’. ‘X’ issues a Cheque of Rs.20, 000 in favor of ‘Y’
which is a crossed Cheque of Dubai Islamic Bank Ltd. Mr. ‘Y’ that maintains its account
in Habib Bank Ltd, presents this Cheque in his bank for payment. Habib Bank Ltd takes
the Cheque from client and payment is credited to his account. On the other hand the
account of State Bank with Habib Bank Ltd is given a debit. The Cheque is then sent to
the State Bank via N.I.F.T where all the banks maintain their accounts for clearing of
Cheques. State Bank credits the Dubai Islamic Bank account for Rs.20000 and debits the
account of Habib Bank Ltd for Rs.20000. Dubai Islamic Bank on receiving the Cheque
through N.I.F.T., credits the State Bank account and gives a debit to the customer’s
account because Rs.20000 have been reduced from the account. Hence, this is the way to
facilitate the customers of different Banks with almost 100% security of payment and
without the wastage of time. Process of clearing goes on but the client has not to wait
until the completion of the process and he receives the payment on the spot.
The accounting entries which are passed by different concerned persons during this
whole process are mentioned below:
Accounting entries:
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By Dubai Islamic Bank;
Customer (A) A/C Dr. Rs.20000
SBP A/C Cr. Rs.20000
By Habib Bank Ltd;
SBP A/C Dr. Rs.20000
Customer (B) A/C Cr. Rs.20000
By State Bank of Pakistan;
Dubai Islamic Bank A/C Dr. Rs.20000
Habib Bank Ltd A/C Cr. Rs.20000
SOME COMMON STAMPS USED IN THE BANK
Following are the stamps commonly used in documentation process.
Dater
Round Stamp
Posted Stamp
Paid Stamp
Account closed Stamp
Void stamp
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Original seen verified stamp
A stamp having Branch code, Nature of Account code and Account number of the
individual.
Authorized signature Stamp
Receiving stamp used in cash department
Receiving Stamp along with round clock being Used when client receives check
book
A stamp containing instruction for photo account holder that cheque be signed in
the presence of Bank Officer.
Admitted stamp
Verified stamp
It is very important that the stamps should be used very carefully during the stamping
process. These were the common stamps which are seen by me during the Internship
period.
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I would like to dedicate this report to all of my
Teachers specially the In charge of SOIBF Sir Khaliq
uz Zaman and Head of Department IIIE Sir Attiq uz
Zafar and all other teachers who taught us through
out the course of MSc.
I would also want to remember all of my friends
& class fellows, May God help them and guide them
in future as well.
How the Internship Work was Related to the
MSc Studies: -
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In MSc we studied the subject of Islamic Banking and Finance I have come to know that
how practically banking means, how to deal with the banks, how to deal with the banking
transactions, how to deal with the bank accounts of the employees of the organization.
In MSc we studied the subject of Accounting I come to know how to maintain the
books of accounts of the organization.
MSc teaches us accounting transactions but my job teaches me how practically
the accountancy applied in the official work.
In MSc we studied how to allocate the resources but in internship I practically
watch the system of allocation or distribution.
In MSc we studied the subject of computer in which we learnt how to work on
word, Excel, Power point. In my job these all things help me a lot. I made the pay
bills on Excel and made drafts on Microsoft Word.
In MSc our teachers tells us how to manage the work in the big organizations,
which is helping me in managing the Accounts/Finance Section of such a big
organization.
Threat
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The main threat for them is their competitors both conventional banks and especially
Islamic banks who are providing some very advance facilities at a very reasonable rates.
Weaknesses
Marketing as a tool is not being used as appropriately as it was to be used. That’s why
majority of the public not only is unaware about the Islamic modes of finance but also
does not know about the major distinctive features of these products. More surprising is
that, a majority of general public does not know about the initiation of the Islamic
Banking Branches by Dubai Islamic Bank Ltd. Hence, the bank is unable to compete face
to face the other Islamic Banks in the market.
Staff in different departments doesn’t have the basic knowledge of Islamic Banking.
They normally are unable to explain and satisfy a visiting client about the structure of
product and its Islamic essence.
Their main weakness is that people at high posts have not well knowledge of Islamic
Banking as is required.
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Suggestions For Above Specified Problems
Some solutions to above-mentioned weaknesses have been suggested in the following
lines;
To improve the clientele of any institute its marketing department must be
focused. So, some key points for the improvement of this department are specified
below.
Either marketing personals should be appointed or services of a reputed marketing
firm should be hired in this respect.
Public awareness should be created through public messages by boarding,
advertisement in newspapers, television and public event celebrations.
Employees should be advised and asked for the maintenance of better customer
relationship.
People with specialized knowledge and expertise should be managed on proper
grounds and they should be directed to a right direction.
The staff should be given proper training on Islamic Banking concepts. The
course should be designed in such a way that they can understand the underlying
concepts on products of DIB as urgent as possible. Otherwise, this may detract
some of valuable clients.
To make improvement in their banking system first of all they have to change
their traditional attitude that is they must have to adopt new marketing techniques
like customer is the king etc.
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They should employee young masters’ degree holders in the relevant field on
merit to enhance the efficiency of the bank.
Some extra benefit should be given to the efficient workers to motivate them.
Their should be time card allotted to every employee at any level to make sure
that how much time workers works & to get actual productivity.
They should start strong advertisement scheme on television to compete with
competitors.
Proper training should be given to all employees.
Foreign tours should be arranged off and on to have the latest information any
where in the world.
CONCLUSION
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It is an admitted fact that Banks transacting business on profit and lose sharing basis can
face serious set backs, if there is a void spread tendency in society to adopt false counting
practices to conceal profits. In countries, where interest based and interest free banking
institutions are simultaneously operating, the problem of false account can, to some
extent, be tackled as the financing can be done on selective basis to trust worthy parties.
In a system based on profit and lose sharing, it is to the advantage of bank and financial
institution to invest in those projects where high rates of profits are anticipated. The
financing by Islamic Banks under this system is done with in the frame work and keeping
in view the social consideration, the requirements of priority sector and safety of funds.
The Islamic System, if truly practices, therefore, induced savings and capital formation
and lead to optimum allocation of resources.
The enforcement of Islamic Banking System, in totality, in a county requires meticulous
planning, determination and willingness of large majority of its people. It should be a
good idea to device an Islamic Economic Model which has to be flexible within the
frame of work of socio-economic situation of each individual country. High taxes, willed
and unchecked inflation, over-emphases on materialism, unethical practice prevailing in
the society, incompatible laws and poor administration thereof are major factor which
hamper the movement towards Islamic System.
Islamic Banking System cannot be enforced by a stroke of the pen. This will be
disastrous. While taking steps to enforce Islamic Banking, it will have to be seen that
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interest is eliminated in such a way that it does not abruptly disturb the basic structure of
the economy. It has also to be insured that initially the confidence of the people is
developed and strengthened in the new system. This approach would also provide an
Opportunity to refine the newly formed laws to support the Islamic System of Banking in
light of experiences gained during the process.
After doing work in DIB, I am in a position to conclude that the Islamic Banking
Services provided to the customers are properly screened and checked by the Sharia
Advisor. The working environment of the Bank is very much friendly and cooperative.
Dubai Islamic Bank has a unique status among other Islamic Banks because of its high
profit rates, security deposits and quick processing methods for processing of
applications. There is a good training system for the internees as well. The staff currently
working in the Bank is highly cooperative and experienced.
I would also like to avail the opportunity to thank all employees of the Bank who helped
and guided me in such a nice way, and also to my institute who provided me this
opportunity as a course requirement to get a practical life exposure.
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