D.I.B New - 1

CHAPTER 1
INTRODUCTION OF SECTOR
National University of Modern Languages 1

INTRODUCTION TO BANKING SECTOR
Evolution of Banking
It has not so far been decided as to how the word ‘bank’ originated. Some authors say
that this word is derived from the word ‘bancues’ or ‘banque’ which mean a bench. The
explanation of this origin is attributed to the fact that the Jews in Lombardy transacted the
business of money exchange on benches in the market-place; and when the business
failed, the ‘banco’ was destroyed by the people incidentally the word ‘bankrupt’ is said
to have been evolved from this practice the opponents on this opinion argue that if it was
so, then how is it that the Italians money changer were never called ‘Banchierei’ in the
middle ages?
Other authorities hold the opinion that the word ‘bank’ is derived from the German word
‘back’ which means ‘joint stock fund’. Latter on when the Germans occupied major part
of Italy the word ‘back’ was Italianized into ‘bank’.
According to another opinion of the historical authorities;

The term “BANK” is derived from an Italian word “BANKO” which means “Bench” that
is where people were meeting and solve their financial matters.
It is therefore not possible to decide as to which of the opinions is correct, for no record is
available to ascertain the validity of any of the opinions.
The term bank is being used for a long time yet it has no precise definition. The basic
reason is that the banks perform not just one but many types of functions. Originally the
banks were supposed to make short term loans to the traders only. The banks now not
only make short term loans to the formers, traders, industrialist etc. But also invest in a
wide variety of long term earning assets.
Modern Banking
Banking in its modern form and structure stared in Britain when many of the Lombardy
merchants came to England in the fourteenth century and settled in the parts of the city of
the London now called Lombard Street.
The king Edward –III established the Office of Royal Exchanger for changing foreign
money at a profit for the benefit of the Crown
In 1854 the joint Stock Companies Act opened an era of corporations; and the
Limited
Liability Act, 1855, restricted the liability of the share holder of the limited company.

The commercial banks also undertake and execute trust, deal in stock, shares and
debentures, issue guaranties and indemnities underwrite and sell new securities, and deal
in foreign exchange etc.
Definitions
According to Dr. Hart
“Banker or bank is a person or company carrying on business of receiving money and

collecting drafts for the customers subject to the obligation of honouring cheques drawn
upon them from time to time by customers to the extends of the amounts available on
their currents accounts”
In the words of G W Gilbert
“A banker is a dealer in capital or more properly a dealer in money. He is an intermediate

party between the borrower and lender. He borrows one party and lends to the another”
Types of Bank
1. Central bank or state bank.
2. Commercial bank.
3. Exchange bank.
4. Industrial bank.
5. Agriculture bank.
6. Investment bank
7. Saving bank.
Central Bank
The first central bank was Riksbank of Sweden established in 1668. This bank is leader of
all other banks. It does not compete for the profit.
Every country has its central bank or state bank. Its major function is to carry out a
country’s monetary policy with an aim to safeguard its financial and economic stability. It
has the monopoly of note issue. It is also the custodian of money market. State bank is the
bank and lender to the government.

Commercial Banks
The first commercial bank was the Bank of Venus which was established in 1771 in Italy.
Commercial banks are profit earning concerns. They receive deposits and advance loans
to the borrows. They greatly help in financing for internal and external trade of the
country. The commercial banks received deposits from the general public, which are
repayable on demand upon written orders of the depositors. As their most distinctive
feature the commercial banks maintain the checking accounts for the constitutions.
The commercial banks are also distinguished for providing short-term finance to trade,
commerce and industry to enable these sectors to expand their productive activities
Exchange Banks
The main function of the exchange bank is to finance the foreign trade by the purchase
and sale of foreign currencies in the form of drafts, bills of exchange, telegraphic
transfers. They also perform the function of commercial bank. Receiving deposits and
advancing loans.
Industrial Banks
During the late 18th and early 19th centuries the trade between countries was financed by
bill of exchange by well-reputed merchant’s houses for which they would charges a
commission for their services Commercial bank cannot afford to block their funds in long
term investments. The industrial banks receive long term deposits and finance the
industries by providing them long term credits. In Pakistan the Industrial bank named as
Industrial Development Bank of Pakistan (I.D.B.P) was established in 1961 for this
purpose.
Agricultural Banks
Agricultural bank provides short and long period loans for financing agriculture. The
agriculturists need short and long term loans for meeting their day to day and long term
requirements for making permanent improvement in the land. In Pakistan Agricultural
Bank is named as Agricultural Development bank of Pakistan (A.D.B.P) and it was
established in 1961
Investment Banks
These banks assists business houses and governmental bodies to raise money through the
sale of stocks and bond for usually long term purposes these banks perform the usual
functions of raising deposits of idle money from the public and finance the business
houses other bodies.

Saving Banks
These are the institutions which are sponsored by the government for having facilities to
the people and small means. These banks collect small saving of people and allow them
to withdraw in small amounts. Also another institution i.e. National Savings is working in
the same capacity. The basic purpose of these banks is to inculcate the habit of saving in
the people. The savings banks deposits are not repayable upon only the written order of
depositor but the depositor of his agent has to appear personally at the saving banks to
make withdrawal and for this purpose he must present a pass book a certificate of deposit
or some similar documents to prove his right to receive his payments. Post office savings
banks and savings accounts at national saving organizations are well known national
saving banks in Pakistan.
Banking is the business of providing financial services to consumers and businesses. The
basic services a bank provides are checking accounts, which can be used like money to
make payments and purchase goods and services; savings accounts and time deposits that
can be used to save money for future use; loans that consumers and businesses can use to
purchase goods and services; and basic cash management services such as check cashing
and foreign currency exchange. Four types of banks specialize in offering these basic
banking services: commercial banks, savings and loan associations, savings banks, and
credit unions. A broader definition of a bank is any financial institution that receives,
collects, transfers, pays, exchanges, lends, invests, or safeguards money for its customers.
This broader definition includes many other financial institutions that are not usually
thought of as banks but which nevertheless provide one or more of these broadly defined
banking services. These institutions include finance companies, investment companies,
investment banks, insurance companies, pension funds, security brokers and dealers,
mortgage companies and real-estate investment trusts
Importance of Banks
The book keeping details of banks and loans are rarely exciting and often confusing but
they of demonstrate convincingly that banks can create money. This implies that banks
must have some direct influence on economic activity because all of our market
transactions involve the use of money. Now, the question arises how the bank can help in
creating money. This can be easily explained with the help of the core concept of basic
money supply. Money supply is equal to the cash prevailing in the economy and the sum
of checking accounts and traveler cheque etc. We know that banks have a required
reservation applicable in their advancing of money. By the concept of advancing money
up till the level of required reserves, banks can more advances than their deposits. In this
way they increase the money supply.

Banks also have the economy in the sense that they can regulate the circular flow of
income when depositors deposit their excessive money in the banks, the banks again put
this money into the flow of economy by giving advances. According to economists, the
primary function of banks is not to store money but to transfer money from savers to
spenders. The banks do so by lending money to businesses for new plants and
equipments, the customers for new homes or cars at government entities that desire
greater purchasing powers.
The importance of banks also becomes clear when they are used as a medium of low risk
transactions of money. With the help of banking system, you can transfer your money by
sitting in Multan to a person in New York. All the commercial banks functions that have
been discussed previously add to the reporters of the banks in general and commercial
banks in specific.

CHAPTER 2
INTRODUCTION TO ISLAMIC SECTOR

Banking History in Pakistan
At the time of partition the total numbers of Commercial Banks in Pakistan were 38 .Out
of these Pakistan had 2 banks, India had 29 and there were 7 exchange banks. The total
deposits of Pakistan banks stood at Rs. 880.0 millions where the advances were Rs 198.0
million. Before the partition of Sub Continent the entire banking business was almost
controlled and managed by non-Muslims. The Muslims were deliberately kept cut of
banking profession by the wealthy Hindu community. When Hindu capitalists became
sure of the division of Sub Continent, they secretly began transferring their capital to the
safe places in India. The funds and the other valuables were transferred at an accelerated
pace to India and there was a mass scale migration of non Muslims from West Pakistan to
India which also caused the drain on the bank deposits.
The Hindus in order to ruin the economy of the newly born State closed down most of the
head offices and the branches of scheduled and non-scheduled banks in Pakistan. The
number of scheduled bank’s branches was reduced from 619 to 213 in both the wings of
the country after independence. The non-scheduled banks also suffered a severe jolt and
their number was reduced from 411 to 106 over the same period. West Pakistan from
where there was greater exodus of non-Muslims to India suffered a great deal, as a
number of branches fell down (from 487 to 69). In the East Pakistan though the number
of branches were not closed in such a great number as in West Pakistan, large portion of
the deposits were with drawn from the banks and transferred to India by the non Muslims.
The mass scale closure of branches and withdrawal of the deposits caused a dead lock in
the banking business in Pakistan. The government of Pakistan was quite aware of the
serious banking situation caused by the withdrawal of deposits and wholesale migration
of banking staffs to India. It took up the challenge and started reorganizing the crippled
banking immediately after partition. A moratorium of free months was also allowed to
banks that had financial difficulty due to sudden withdrawal of deposits.
Each bank has to open at least one central office in Pakistan where it could consolidate
work of all its branches and start paying out to depositors. The government took some
effective measures for providing banking training facilities to Muslims. There were some
complaints that Hindu banks were not honoring the cheques of Pakistani national and
were also refusing to give securities kept in their custody.
The government issued an ordinance, which empowered it to investigate all such

complaints, and if satisfied of their bonafide, the payments should be realized. In case the
bank insisted on non-payments, the government should realize the assets of the banks,
which were sufficient to discharge such liabilities. The government of Pakistan also
allowed the removal of valuables kept in save deposits vaults and lockers by submitting

an application and getting necessary approval from the custodian of evacuee property.
The government of Pakistan tried to provide all kinds of facilities with sincerity to the
known Muslim bankers for restoring normal banking facilities in the country but the
response was discouraging.
An inter dominion agreement was reached between India and Pakistan in April 1949. The
main provisions of the agreement were as under: The inter dominion agreement could
not be fully imported. India delayed the transfer of Muslim deposits to Pakistan. The non-
devaluations decision of Pakistan government further led to the suspension of remittance
facilities through normal banking channels. Due to panicky withdrawal of deposits; some
banks went into liquidation and the payments could not be made to the depositors.
Measures Taken To Develop the Banking System in Pakistan
• The State Bank of Pakistan, which is the central bank of the country, was established
in July 1948.
• The National Bank of Pakistan was established on 1949, to serve as an agent to the
SBP.
• The Industrial Development Bank of Pakistan was set up on August 1, 1961 with a
Paid up Capital of Rs; five crore. The Agricultural Development Bank of Pakistan
(ADBP) was set up in 1961. It provides short, medium and long term loans to the
farmers. In Jan, 1974 the entire commercial banks were nationalized. The weaker
commercial banks were merged with the stronger once and in all five major banking
companies were formed. MCB and ABL have again been privatized.
• Pakistan banking council was set up for coordinating the activities of the nationalized
commercial banks. The banking council formulates the policies and guidelines for the
banks.
• Interest has been eliminated from the banking transaction from July 1, 1985. The
banks are now accepting saving deposits on Profit and Loss sharing bases. Modaraba
and Leasing Companies are also operating in Pakistan.
• The banks nationalized, due to weaknesses such as over staffing, deterioration in
customer services, raising bad debts, loan on political bases etc, are being gradually
denationalized. MCB was privatized in April 1991. The shares of ABL have also been
sold to its 7500 workers. Permission to open ten banks in the private sector has also
been given.
• The permission to open an Investment bank has also been given. It will go a long way
is providing capital for the industrial projects.
• The government of Pakistan has also liberalized the exchange and payment
procedure. The Pakistani firms and companies can now maintain Foreign Currency
accounts in Pakistan on the same bases as known Pakistanis.

Constraints and Obstacles in Islamic Banking
Introduction
An Islamic bank is a financial institution that operates the objective to implement and
materialize the economic and financial principles of Islam in the banking area.
The organization of Islamic conference (OIC) defines Islamic bank as “a financial
institution whose rules status and procedures expressly states its commitment to the
principles of Islamic shariah and to the banning of the receipt and payment of interest on
any of its operations.”
According to Islamic banking act 1983 of Malaysia an Islamic bank is a “company which
caries on Islamic business… Islamic banking business means banking business whose
aims and operations do not involve any element which is not approved by the religion
Islam.”
Objectives
The objective of Islamic banking is not only to earn profit, but to do good and bring
welfare to the people, Islam upholds the concept that money, income and property belong
to Allah and this wealth is to be used for the good of the society.
Islamic banks operate on Islamic principles of profit and loss sharing and other approved
modes of investment. Its strictly avoid interest which is the root of all exploitation and is
responsible for large scale inflation and unemployment.
An Islamic bank is committed to do away with disparity and establish justice in the
economy, trade, commerce and industry; build socio economic infrastructure and create
employment opportunities.
History and Present Status of Islamic Banking around the World
The History of Islamic Banking
The history of Islamic banking can be divided in to two parts. First when it still remained
an idea second- When it remained a reality- by private initiative in some counties and by
law in others.
Islamic Banking as an Idea
The scholar of recent past early fifties started writing for Islamic banking in place of
interest free banking. In the next two decades Islamic banking attracted more attention.
Early seventies saw the institutional environment conference of the finance ministers of
Islamic countries was held. The involvement of institutions and government led to the

application of theory of practice and resulted in the establishment of Islamic banks. In this
process the Islamic development bank was established in 1975.
The Coming into Being of Islamic Banks
The first private Islamic bank, the “Dubai Islamic bank” was also setup in 1975 by a
group of Muslim businessmen from several countries. Two more private banks were
founded in 1977 under the name of Faisal Islamic bank in Egypt and Sudan. In the same
year the Kuwaiti governments setup the Kuwait finance house.
In the ten years since the establishment of the first private commercial bank in Dubai,
more than 50 Islamic banks have coming into being. Though nearly all of them are in
Muslim countries, there are some in Western Europe as well: in Denmark, Luxemburg,
Switzerland and the united kingdom.
In most countries the establishment of Islamic banking had been by private initiative and
was confined to that bank. In Iran and Pakistan, however, it was by government initiative
and covered all banks in the country. The governments in both these countries took steps
in 1981 to introduce Islamic banking.
At present there are Islamic Banks in the following countries:-
01. Afghanistan 17.Gambia 33.Pakistan
02. Algeria 18.India 34.Palestine
03. Albania 19.Indonesia 35.Philippines
04. Argentina 20.Iran 36.Qatar
05. Australia 21.Iraq 37.Russia
06. Bahamas 22.Jordan 38.Saudia Arabia
07. Bahrain 23.Kazakhstan 39.Senegal
08. Bangladesh 24.KibrisTurkish Republic 40.South Africa
09. Brunei 25.Kuwait 41.Sudan
10. Cayman Islands 26.Lebanon 42.Switzerland
11. Cyprus 27.Liechtenstein 43.Thailand

12. Denmark 28.Luxembourg 44.Tunsia
13. Djibouti 29.Malaysia 45.Turkey
14. Egypt 30.Mauritania 46. U.A.E.
15. Germany 31.Morocco 47. U. K.
16. Guinea 32.Niger 48. S. S. A.
49. Yemen.
Problems faced by Islamic banking in the world.
Most of the Islamic Banks operate on Bai- Murabaha, Bai Muazzal, Bai- Salam, Istisna,
Hire Purchase/ Leasing mode of Investment i.e. Islamic Banks always prefer to run on
markup/ guaranteed profit basis having Shariah coverage. For this reason some times the
conventional Economists and General people failed to understand the real difference
between Islamic Banking and conventional Banking.
Mudaraba and Musharaka modes of Investment are ideal but Islamic Banks are not going
in these two modes, the reasons for the above are as follows: There is no systemic
analysis and research and no real efforts to introduce above mentioned two modes but the
practitioners blame the following factors:-
a) There is lack of committed entrepreneur
b) There is lack of committed professional who can create new
c) Instruments.
d) There is lack of committed sponsors who can pressurize the professionals
e) There is shortage of skilled professionals.
The problem of forward contact/booking of foreign currency.
Due to the restrictions of Shariah we can not cover the risk of Exchange fluctuation by
forward contract as Forward Booking is not permitted by Shariah. As per Shariah,
currency, transaction is to be made under certain terms and conditions laid down for
“sarf” by Shariah, such as spot possession of both the currencies by both the parties
which is not available in forward Booking. It is also prohibited to deal in the forward
money market even if the purpose is hedging to avoid loss of profit on a particular
transaction effected in a currency whose value is expected to be declined. This problem
requires a solution by Shariah experts.

Inland Bill Purchase/Foreign Bill Purchase:
This is another problem of Islamic Bank where the exporters immediately after export of
the goods approach to the bank for fund before maturity of the bills to meet their daily
needs. Here the Bank has to deploy billions of Taka each year but how and on what mode
of investment? The Bank can not take anything by providing fund to the exporter except
collection fee for collection of the Bill, which is very poor.
Unfamiliarity with the Islamic Banking System
The first problem is that despite the growth of Islamic banks over the last 30 years, many
people in the Muslim and non-Muslim world do not understand what Islamic banking
actually is. The basic principle is clear, that it is contrary to Islamic law to make money
out of money and that wealth should accumulate from trade and ownership of real assets.
However, there does not appear to be a single definition of what is or not an Islamic-
banking product; or there is not a single definition of Islamic banking. A major issue here
is that it is the Shariah Councils or Boards at individual Islamic banks that actually define
what is and what not Islamic banking is, and what is and what is not the acceptable way
to do business, which in turn can complicate assessment of risk for both the bank and its
customer.
Portfolio Management:
The behavior of economic agents in any country is determined partly by past experience
and present constraints. The Islamic banks are still growing in experience in many
countries. Regarding constraints, Islamic banks in different countries do not freely choose
arrangements, which best suit, their need. As a result, their activities are not demand-
oriented and do not react flexibly to structural shifts in the economic setting as well as to
changes in preferences It is known to the bank management that a certain portion of the
short-term fund is normally not withdrawn at maturity; these funds are used for medium
or long-term financing. However, a precondition for this maturity transformation is that
the bank be able to obtain liquidity from external sources in case or unexpected
withdrawals.
The Regulatory environment
The relationship between Islamic banks and monetary authorities is a delicate one. The
central bank exercises authority over Islamic banks under laws and regulations
engineered to control and supervise both traditional banks. Whatever the goals and
functions are, Islamic banks came into existence in an environment where the laws,
institutions training and attitude are set to serve an economy based on the principles of
interest.

Absence of Liquidity Instruments
Many Islamic banks lack liquidity instruments such as treasury bills and other marketable
securities, which could be utilized either to cover liquidity shortages or to manage excess
liquidity. This problem is aggravated since many Islamic banks work under operational
procedures different from those of the central banks; the resulting non-compatibility
prevents the central banks from controlling or giving support to Islamic banks if a
liquidity gap should occur. So the issue of liquidity management must come under active
discussion and scrutiny by the authorities involved is Islamic banking.
Use of Advanced Technology and Media
Many Islamic banks do not have the diversity of products essential to satisfy the growing
need of their clients. The importance of using proper advanced technology in upgrading
the acceptability of a product and diversifying its application cannot be over emphasized.
Given the potentiality of advanced technology, Islamic banks must have to come to terms
with rapid changes in technology, and redesign the management and decision-making
structures and, above, all introduce modern technology in its operations. \
Need for Professional Bankers
The need for professional bankers or managers for Islamic banks cannot be over
emphasized. Some banks are currently run by direct involvement of the owner himself, or
by managers who have not had much exposure to Islamic banking activities, nor are
conversant with conventional banking methods. Consequently, many Islamic banks are
not able to face challenges and stiff competition. There is a need to institute
professionalism in banking practice to enhance management capacity by competent
bankers committed to their profession. Because, the professionals working in Islamic
banking system have to face bigger challenge, as they must have a better understanding of
industry, technology and the management of the business venture they entrust to their
clients.
Blending of Approach of Islamic Scholars with the Approach of the

Conventional Bankers
Bankers, due to the nature of their jobs have to be pragmatic or application-oriented.

There is and will be tendency in the bankers practicing in Islamic banks to mould or
modify the Islamic principles to suit the requirement for transactions at hand.
Additionally, being immersed in the travails of day to day banking, they find little time or
inclination to do any research, which can make any substantial contribution to the Islamic
banking. Islamic Scholars active in researching Islamic Banking and finance, on the other
hand, typically have a normative approach, i.e. they are more concerned with what ought
to be. A very few of them are knowledgeable about banking or the needs of the
customers.

CHAPTER 3
INTRODUCTION OF ORGANIZATION

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 on the Day of
Judgment.
Allah has clearly ordained the prohibition of Riba in the Glorious Quran. Verses [2:278-
279] translate into:
278. “O ye who believe! Fear Allah, and give up what remains of your demand for
usury, if ye are Indeed believers”
279. “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”
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.
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
Wakala structures.

History & Background
Company Profile
History:
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 (shares) 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 Pakistan Limited (DIBPL), commenced operations in 2006. Since
then, DIBPL has undertaken major initiatives to expand its branch network across the
country. Under its consumer banking division, the bank is offering state-of-the-art
Shariah compliant products that effectively compete with those being offered in the
market by conventional banks. It also has expertise in providing Retail, Private, Small
and Medium Enterprises, Corporate, Investment Banking and Advisory services.
The Bank launched Pakistan's first Islamic Visa Debit Card and introduced financial
products covering Home Financing, Auto Financing, and Depository products.
DIBPL has also introduced Priority Banking and Internet Banking, both of which are
being recognized as benchmark products in their respective categories. Besides regular
banking services, the Bank is committed to bringing foreign investment to the country.
DIBPL's corporate wing has actively pursued foreign investors and convinced world
renowned giants from the GCC to be part of Pakistan's economy.
DIBPL is 100% owned by Dubai Islamic Bank PJSC (Public Joint Stock Company) and
its nominated shareholders. The parent company is a listed company in Dubai.
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
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 Shariah compliant
home mortgage financing and has recently launched an Islamic Visa Debit Card.
In a short span of two 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 2007. DIBP customer base has
grown by 228% to approximately 21,000 customers in 2007, 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
2007. 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.
Vision
“Dubai Islamic Bank Pakistan Limited ('DIBPL') will be the leading provider of world
class banking – the Islamic way by being the first choice of our customers and our
employees”

Mission
“DIB Pakistan provides Sharia compliant financial services and products through the best
of innovation, talent and technology”
Core Values
We aim to be an organization that is founded on…
• Growth through creation of sustainable relationships with our customers.

• Prudence to guide our business conduct.
• A national presence with a history of contribution to our communities.
We shall work to…
• Meet expectations through Market-based solutions and products.

• Reward entrepreneurial efforts.
• Create value for all stakeholders.
We aim to be people who…
• Care about relationships.

• Lead through the strength of our commitment and willingness to excel.
• Practice integrity, honesty and hard work. We believe that these are measures of true
success.
We have confidence that tomorrow we will be…
• Leaders in our industry.

• An organization maintaining the trust of stakeholders.
• An innovative, creative and dynamic institution responding to the changing needs of
the internal and external environment

Corporate Profile
Management Team
Name Designation
Junaid Ahmed CEO
Syed Mujtaba Abbas Head of Consumer Banking
Azhar Aslam Head of Corporate & Investment Banking
Jawad Majid Khan Head of Distribution, Middle Markets & SME
Zahid Mansoor Head of Treasury
Tahir Nazir Chaudhary Head of Risk Management
Dr. Muhammad Qaseem Country Head of Sharia’
M. Aamir Banatwala Head of Operations
Irfan Johar Chief Internal Auditor
Ammar Bin Mujeeb Head of Information Technology
Wamiq Rizvi Head of Human Resources
Syed Ammar Ali Zaidi Chief Financial Officer
Uzman Naveed Chaudhary Company Secretary and Head of Legal
Shahid Rehman Siddiqui Head of Compliance

Members of Dubai Islamic Bank’s Fatwa & Sharia’ah Supervision
Board are:
• Dr Hussain Hamid Hassan (Chairman)

• Dr Ali Mohi Aldin Al Qura Daghy
• Dr Ajeel Jasim al-Nashmi
• Sheikh Mohammed Abdul Razak Alsidiq
• Dr Mohammed Abdul Hakim Zoeir (General Secretary)
Dubai Islamic Bank branch network

December 2009: Dubai Islamic Bank Pakistan Limited (DIBPL) opened 8 new branches
during 2009 expanding the branch network to 25 in 10 cities of Pakistan. The new
branches include 6 full service branches namely; Haidery and Shaheed-Millat Road, Z
block in Lahore, F10 Islamabad, Satiana Road Faisalabad and Gawadar and 2 sub-
branches namely;Dean Center in Peshawar and Khayaban-e-Ittehad in DHA, Karachi.
Organizational Structure
Functional structure:
DIBPL has highly functional structure. They follow the rules, regulations and policies in
carrying day –to- day business. Number of policy manuals, job descriptions and rules are
high because the statutory requirements are quite high.
Also the nature of jobs is such that the chance of fraud and embezzlement is high so
formalization is also kept high.
• Tasks are allocated to all the employees according to their qualification and
experience.
• Well defined authority.
• Promotion based performance.
Divisions at D.I.B.P.L
• Administration Division
• Consumer Asset
• Credit Risk Management
• Human Resources
• Finances
• Internal Audit Division
• JCR VIS Credit Rating

• (JCR-VIS credit rating Company limited has assigned a medium to long term entity
rating “A” to Dubai Islamic Bank Pakistan Limited with a “stable”outlook. Short term
rating has been assigned at “A-2”)
• Sharia
• SME Credit
• Trade Operations
• IT
• Treasury
• Compliance
• ISD

Organizational Hierarchy and control at DIBPL Peco Road Lahore:

B. M
Irfan
Soofi
CRM I.T
Op. Auto
consultant
Manager Financing
Usman
Zahid Mumtaz
Ameen Yasir
Abbas Ali
Tufail
CRO CRO
Financial Financial Financial Head
Consultant Consultant Khurram Khurram Consultant Teller
Rukhsana Sumran Butt Zaidi Sulman Khalid
Khan Ali Imtiaz Bin Niaz
Cash
Handling
Yasir
Habib
Clearing
Officer
Mubashir
Ahmad
Malik

Code of Conduct
Responsibilities to Dubai Islamic Bank Pakistan Limited
It is the responsibility of every employee to ensure that he / she strictly complies with the
decisions, orders and recommendations issued by the Sharia Board / Sharia Advisor of
the Bank in all matters related to the Bank, and to bolster the image of the Bank as a
leading Islamic Bank.
1. Privacy / Confidentiality
Dubai Islamic Bank Pakistan Limited recognizes and protects the privacy and
confidentiality of employees’ medical and personnel records. Such records must not be
shared or discussed outside Dubai Islamic Bank Pakistan Limited, except as authorized
by the employee or as required by law, rule, regulation or order issued by a court of
competent jurisdiction or requested by a judicial, administrative or legislative body.
Requests for such records from anyone outside Dubai Islamic Bank Pakistan Limited
under any other circumstances must be approved by Head of Human Resources.
2. Ethical Standards And Business Practices
The Bank expects its employees to establish its corporate image as a socially & ethically
responsible Bank thereby commanding trust/confidence of the general public, clients,
government and regulating authorities which is critical to its success, prosperity and
image. Employees shall perform their work with honesty, diligence, and responsibility.
3. Respect For Others

Each employee shall endeavor to co-operate fully with all other employees of the Bank
and to carry out assigned duties in accordance with instructions and advice from senior
employees. Further, each employee should;
i. Not permit retaliation against employees for reporting conflict of interest, suspicious
activities, violation of regulatory rules/directives and internal Bank rules.
ii. Promote and implement Non-discriminatory and Anti Harassment Policies in true letter
and spirit.
4. Employees' Grievances

The maintenance of discipline is essential for the efficient conduct of operations, and
working relationships must allow for rapid airing of grievances at all levels.
The Bank has established a separate policy for dealing with employees' grievances.
5. Objectivity
Employees shall not participate in any activity or relationship that may be in conflict with
the interests of the Bank.
Employees shall not accept anything that may impair or be presumed to impair their
professional judgment.
Employees shall comply with all applicable laws and statutory/regulatory
laws/rules/regulations, requirements / orders and directives as well as internal Bank
policies.
6. Competency
Employees shall exercise skill, care and diligence in the conduct of all their Banking
activities.
7. Secret Profits
An employee's position precludes him from taking a personal profit from any
opportunities that result from his employment; he is acting honestly and for the good of
the Bank. Any profit arising in such circumstances must be accounted for to Bank that is
to be paid over to the Bank. This applies whether the profit arises from a contract with the
Bank or a third party.
8. Bribery
The payment or receiving of bribes, kickbacks or other payments in cash or kind to obtain
business or otherwise be given advantage for DIBP is strictly prohibited, irrespective of
whether payments or offers are made directly or (knowingly) via an intermediary.
9. Communications with Regulating & other Authorities
The Bank deals with its regulators in an open and co-operative manner by providing
complete, relevant, accurate and credible information on time. Information relating to
suspicious activities relating to money laundering is routed through Compliance
Department to the relevant authorities.
10. Gift Acceptance
Bank prohibits employees from accepting gifts, favors, entertainments or other benefits
directly or indirectly from customers, business contacts, suppliers/ vendors, subordinates

or candidates seeking employment in the Bank which may affect their assessment or have
impact on the banking business at large.
11. Proper Business Practices
The use of any funds or assets of the Bank for any unlawful or improper purpose is
strictly prohibited.
The Bank prohibits its employees from engaging in politics. They are prevented from
becoming members of any political party or to take part or assist in any way any political
movement within or outside the country.
All employees of the Bank are responsible for bringing violations of this Policy to the
attention of the senior Bank management through normal reporting channels. In addition,
all managers are responsible for taking corrective action when potential violations
involving the Policy come to their attention.
Dubai Islamic Bank bags prestigious Islamic Finance News Awards

January 2009: Dubai Islamic Bank Pakistan Ltd. (DIBPL) outshone at the 4th Annual
Islamic Finance News Awards, bagging two prestigious awards “Sovereign Deal of the
Year” and “Pakistan deal of the Year” for its consortium-led deal of Pakistan Domestic
Sukuk Company. The award category highlights Government of Pakistan’s three-year
PKR6.525 billion (US$85 million) deal in September 2008 by Pakistan.
This Ijara Sukuk program was organized by Dubai Islamic Bank Pakistan in collaboration
with Standard Chartered Bank (Saadiq) to raise money for the general purposes of the
Government of Pakistan. It allows ongoing fund raising and establishes a Sukuk auction
system akin to that for T-bills whilst allowing for various tenors. This deal plays a pivotal
role in opening of the Pakistani market and building the infrastructure for future
transactions as well as alleviating some of the financial burden.
Other awards bagged by DIB were “Best Islamic Bank in UAE”, “Best Islamic Wealth
Management Provider”, “Sukuk of the Year (Tamweel)”, Corporate Finance Deal of the
Year (Al Jaber Group).

Chapter 4
Different Departments in Branch

There are 5 main departments at the branch:
1- Customer services department
2- Operations department
3- Credit department
4- Trade finance department
5- Cash department
1- Customer Services Department

Account opening and closing is the function of customer services deptt. The bank’s
customers includes individuals (single or joint), firm (partnership/proprietorship),
Autonomous corporations, Limited companies, Charitable Institutions, associations,
Educational Institutions or local bodies.
Brief Explanation of these accounts is as follows
Corporate Banking
The world of finance belongs to those who shape it. DIB has taken a leading role in
shaping the dramatic transformation that UAE has experienced in the last two decades.
Now, with the same vigor, the Bank comes to assist businesses in Pakistan.
DIBPL provides a wide range of services specifically designed to assist Pakistani

businesses. You can benefit from our:
1. Cash Management Services
DIBPL Cash Management offers comprehensive end-to-end Sharia compliant solutions to

meet your cash flow requirements. With our help, you can reduce turn around times for
your accounts receivables, better manage your payables, and benefit from our value-
adding MIS reports. GL reconciliation would have never been easier for you.
Collection
DIBPL is an expert at facilitating the collection of sales proceeds and converting your
Receivables into Funds Available. You are provided the facility of maintaining a single
concentration account. Collections from all over Pakistan (cash/ cheque/ pay order/
demand draft) will be credited to this main account via DIBPL's real time online branch
network.

Payment Product
The product facilitates clients in managing their outflow of funds. The outflows can be
through Pay Order/Demand Draft or by way of electronic cheques issued at the client’s
office.
Depository Services / Liquidity / Funds Management
In DIBPL's suite of Shari'a approved Investment Depository Products, your organization

will certainly find just the right combination of attractive returns and enhanced liquidity
that it requires. Enhance your funds management like never before.
Cash-In-Transit Services
DIBPL can arrange for its clients a secure pick up of cash from the customer’s door step
for deposit at DIBPL's nearest branch.
2. Trade Related Services
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.
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), Documentary Collections and Open Account
Wakala Istithmar Facility (Exports)
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
our Shari’a expertise and edge in bringing new Shari’a compliant products to the market
for promotion of Islamic banking and ridding those who desire Halal income.
Through this facility DIBPL is able to finance the exporter before shipment, be it in pre-
manufacturing or post manufacturing scenarios.

Wakala Cum Istisna’a Facility (Local Supplies)
Istisna’a 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 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 L/Cs to corporate customers under
Wakala Istisna facility.
3. Investment Banking Services
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.
• Sukkuk Issuance.
4. Services for Small and Medium sized Enterprises
Consumer Financing
Home Finance
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).
Personal Loan

The bridge between dream and reality is Dubai Islamic Personal Finance. Dubai Islamic
Bank Personal Finance is the first Islamic Personal Finance being offered in Pakistan.
DIBPL Personal Finance will soon be the answer to all your problems and means to
personal bliss! With our unique Personal Finance facility you will have the power to
enjoy all imaginable products and services at your disposal in a truly Shariah complaint
manner.
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.

Chapter 5
COMPANY / MARKETING MIX

Company / Marketing Mix
The Products DIB is offering:
1- Al-Islami Current Account:
Al- Islami Current Account gives customer the options of having an account in PKR,
USD, GBP, EUR, and JPY. Al- Islami Current Account ensures that all the banking
needs are met non-stop from 9-5.
Salient features:
• Unlimited deposits and withdrawals

• Free funds transfer.
• Free VIS/ATM DEBIT CARD.
• Accounts can be opened in PKR, USD, GBP, EUR, and JPY
• 24/7 Phone Bank
• Free Account Statement.
• 9 to 5 Non-Stop Full Service Banking.
• Personalized service from dedicated Relationship Managers.
Current
• Launched in April 2006

• Amount Outstanding (as of 26th Apr) PKR 1.795 Billion
• Number of Accounts 5,982
• Based on Wadiah Contract
• Target Customers
Business men/women and individuals who want a transaction account for their high
number of transactions and day to day banking needs
Salient Features
• No limit on number of transactions

• Access to account at all DIB branches across Pakistan
• VISA debit card available for access to millions of VISA merchants and ATMs
worldwide
• 24 Hour Call Center available for problem free banking

• Just fill in the Dubai Islamic Bank Account Opening form, attach your National
identity Card (NIC), and become an Al-Islami Current Account Holder.
2- Al-Islami saving Account:
Enter the world of profitability with a belief. The Al-Islami Saving Account ensures
profitability in line with your beliefs. Now you can enjoy Halal profit with the
convenience of a checking account.
Salient features:
• Accounts can be opened in PKR, USD, GBP, EUR and JPY.

• Monthly profit payment.
• All investments on profit and loss sharing basis.
• VISA\ATM Debit Card.
• 24\7 Phone Banking.
• 9 to 5 non-stop full Service Banking.
• Free Cheque Book.
• Personalized service from dedicated Relationship Managers
Current:

• Based on Un-restricted Mudaraba contract
• Profit Calculated on Monthly Average Balance and to be eligible for profit the
balance should not fall PKR 25,000 at any day during the month
• This product is targeted towards individual savers
• Salient Features
worldwide
• 24 Hour Call Centre available for problem free banking
• Three deposit tiers each offering varied rates of profit from time to time as per
market conditions
• Up to Rs.25, 000
• Rs.25, 000 to Rs.100,000

• Greater than Rs.100,000
How is the profit calculated for the Savings Account?
Profit is calculated on the average for the month (value-dated). The profit rate applied
will depend on the tier in which the average balance falls in. Not eligible if balance falls
below Rs. 25,000 (USD 500) at any day-end. Relaxation given for first (account opening)
month. Account can be opened with zero balance but first deposit transaction should
bring balance to Rs. 25,000 or above to be eligible for profit for the month.
Enter the World of Islamic Banking
Just fill in the Dubai Islamic Bank Account Opening form, attach your National identity
Card (NIC), and become an Al-Islami Saving Account Holder.
3- Al-Islami Saving Plus Account:
The purpose of this account is to introduce the habit of saving individuals in the
neighborhood. The profit on saving accounts is paid on the basis of profit and loss sharing
at 3% monthly, quarterly and yearly depending on the customer. The minimum balance
requirement for opening the account is Rs.10000.
Salient features:
• Accounts can be opened in PKR, USD, GBP, EUR and JPY.

• Monthly profit payment.
• VISA\ATM Debit Card.
• 9 to 5 non-stop full Service Banking.
• Free Cheque Book.
• Personalized service from dedicated Relationship Managers
Current
• Launched in May 2006

• Amount Outstanding (as of 26th Apr) PKR 761.52 Million
• Number of Accounts 249

• Profit Calculated on Monthly Average Balance.
• It is targeted towards Rate Sensitive high net worth clients
• Salient Features
• Offered only in Pak Rupees
worldwide
• 24 Hour Call Centre available for problem free banking
The following deposit tiers are available each offering varied rates of profit from time to
time as per market conditions
Rs.1 million to Rs.4.99 million
Greater than Rs.100 million
How is the profit calculated for the Savings plus Account?
Profit is calculated on the average for the month (value-dated). The profit rate applied
will depend on the tier in which the average balance falls in. No profit if average balance
is below Rs. 1,000,000 for the month. Relaxation given for first (account opening) month.
The average will be calculated from the day the first deposit is made. Which means that
the account may be opened with a zero?
Balance but those days will not be taken into consideration for calculating the average of
the first month.
Savings plus Worked Example
Average is calculated from 17-Apr-06 onwards (first deposit) and profit is paid since
average is above Rs. 1,000,000.

Card (NIC), and become an Al-Islami Fixed Deposit Account Holder.
4-Al-Islami Fixed Deposit Account:
Get the best of both worlds. With the Al-Islamic Fixed Deposit Account, get the benefit
of attractive profit with the flexibility of earning it in various flexible payment options.
Salient features:
• Multiple Tenure Options Available:

a) 1 months
b) -3 months
c) -6 months
d) -1 year
e) -2 years
f) -3 years
g) -5 years
• Pre-mature encashment available at any time.
• 9 to 5 Non-Stop Full Service Banking.
• Personalized service from dedicated Relationship Managers.
• Profit can be collected monthly, quarterly, or at maturity.
• Offered only in Pak Rupees with minimum balance requirement of PKR 100,000
Current

• Convenient profit options with flexible investment tenors.
• Target Customers: It is targeted towards investors who want to invest in short or long
term with their savings or excess liquidity
How many Categories of Fixed Deposits are being offered?
There are three categories currently being offered in the fixed deposits namely:
Maturity

Quarterly
Monthly
What are the Investment options?
The following Fixed Deposit investment options are available to the customer:
How is the profit paid?
The profit is not paid based on calendar month like from 15th January to 15th February in
case a TDR is booked on 15th January the profit would be paid for the 15 days of January
based on the rate declared for January.
For the broken period of the first 15 days of February the profit will be paid in March
when the profit rate for February would be declared.
Card (NIC), and become an Al-Islami Fixed Deposit Account Holder.
5-Car Ijara Financing
Ijarah means lease, rent or wage. Generally, Ijarah concept means selling benefit or use or
service for a fixed price or wage. Under this concept, the Bank makes available to the
customer the use of service of assets / equipments such as plant, office automation, motor
vehicle for a fixed period and price.
The product is designed to provide our customers financing facility for acquiring vehicles
(both Commercial and Private), machinery and/or other fixed assets. It is a contract
whereby the Bank provides customer asset on a rental basis for fixed periods. Under
Ijarah the ownership of the asset remains with the Bank e.g. Dubai Islamic Bank Car
Ijarah.
Dubai Islamic Bank, the preferred bank in Auto Finance provides you with the best
possible options for financing your dream vehicle in the most convenient and cost
effective way.
Sign and drive away with the following benefits
• Most Attractive Profit Rate.

• Payment unto 60Mths.
• Special Insurance Rates.

• Financing Service and insurance contracts.
• Zero down payment option.
• Salary Transfer not required.
• Hassle free and fast approvals.
• Financing New, Used, Commercial, and Luxury Vehicles etc.
6-Murabaha Financing
Under this product the client and the Bank enter into a sale contract. The required goods
are first purchased by the Bank and then sold to the customer for a specific period and at
an agreed Murabaha price.
A contract between Bank and a Customer under which the Customer first purchase
certain good/ commodities/assets as an Agent of the Bank and Bank after taking
possession of the goods/ commodity / assets sells it to the same Customer by adding
certain profit margin to its cost.
Murabaha Sales Price = Cost + Expenses incurred + Agreed Profit
7-Al Islami Home Finance Musharka
This is a lease contract wherein the Bank (lessor) leases the property to the customer
(lessee) in return for a rental payment for a specified financing period. The Bank
promises to transfer the title of the property to the customer at the end of the financing
period if all payments have been made.
The customer identifies a property (i.e. house/flat etc) that he/ she want to purchase and
approaches Dubai Islamic Banking for financing.
This product is offered to customers acquiring ready property. The customer has the
option of choosing from a variety of down payment, tenure and profit rate options. This is
ideal for customers looking for an easy installment scheme.
With MUSHARAKA, we offer you installments at a variable profit rate, at the end of
which you can own your home.

Features:
• Finance available up to 95% of property value.

• High finance amount available
• Flexible tenure up to 25 years.
• Salary transfer not required.
• Islamic insurance available.
• Competitive profit rates.
Mudaraba (Fund Management)
• Fund Provider and entrepreneur join hands to form Mudaraba .Fund Provider is called
Rab Al Mal and the entrepreneur is termed as Mudareb Rab Al Mal provides funds
and Mudareb invests them by using his skills and expertise to earn profit for
Mudaraba
• Mudaraba contract is for an agreed period of time Entrepreneurs.
• Mudaraba is a juristic personality and separate from Rab Al Mal and Mudareb
• On one hand DIB is Mudareb to depositors and on the other, it is Rab Al Mal with its
clients needing finance.

• Distribution of profit is carried out at pre-agreed ratio between DIB and the
depositors.
• Capital and profit share for Rab Al Mal is returned upon completion of Mudaraba
period or upon culmination of Mudaraba transaction
• Mudareb carries out management of Mudaraba at full discretion within the terms of
Mudaraba contract Rab Al Mal does not interfere in Mudaraba affairs. Any undue
interference by the Rab Al Mal may render the Mudaraba void
• All running expenses of Mudaraba are borne by the Mudaraba Entrepreneurs.
8-Visa Debit Card/Atm Card
An electronic card issued by a bank, which allows bank clients access to their account to
withdraw cash or pay for goods and services.
Features:
• First Islamic bank to launch a Visa Debit card in Pakistan

• Accepted globally at over one million Visa branded ATMs and 24 million merchants
• Accepted at all 1-Link and MNET ATMs nationwide
• Unlimited number of Supplementary cards
• Convenient, Quick, Safe
• Signature based for POS, PIN to be entered on ATMs
• ATM Transaction Limit set at Rs. 20,000
• ATM Daily Withdrawal Limit of Rs. 50,000
• Funds Transfer Daily Limit of Rs. 300,000
• Global Customer Assistance Service (Lost Card/inquiries)
• Zero Loss Liability after reporting that card is stolen
Istisna (Build / Manufacture)
• Istisna in Arabic means to manufacture, to build or to construct.

• Istisna is adopted to finance the construction of buildings, and manufacturing of
vessels, aircrafts, etc., for setting up industries or any other asset which requires to be
built from scratch.
• DIB agrees to build real estate, movable asset, industrial project and enters into Istisna
agreement with the client.
• Title to “described asset / project” is passed to the client upon entering into Istisna
agreement
• No need for sale contract upon delivery for effecting title transfer Price, payment
terms and specifications are agreed between client and DIB in the Istisna agreement.
Price may be paid in phases, as the job progresses Client is obliged to take delivery of
the asset upon completion.

9-TAKAFUL AS ALTERNATIVE TO CONVENTIONAL INSURANCE
All human beings are invariably exposed to the likelihood of meeting catastrophes and
disasters giving rise to misfortunes and sufferings such as death, loss of limbs, accident,
destruction of business or wealth, etc. Notwithstanding belief of all Muslims in Allah and
Qadha-o-Qadr, Islam provides that one must find ways and means to avoid such
catastrophe and disaster wherever possible, and to lighten his or his family's burden
should such event occur. One possible resort in this contest is insurance cover as
available in the conventional system.
Different views have been expressed about the status of conventional insurance from the
point of view of Islam. An overwhelming majority of the Shariah scholars believe that it
is unlawful due to involvement of Riba (interest), Maisir (gambling) and Gharar
(uncertainty).@ As such, a consensus has been evolved about its prohibition in the light of
the principles of the Shariah.
Takaful, Islamic alternative to insurance is based on the concept of social solidarity,
cooperation and mutual indemnification of losses of members. It is a pact among group
members who agree to jointly indemnify the loss or damage that may inflict upon any of
them out of the funds they donate collectively. As per practice of the Takaful companies,
a part of contributions (premiums) under Takaful system falls under the category of
donation in order to spread liability with the objective of common good. The remaining
part of the premium is given on the basis of Mudaraba. Therefore, structure of Takaful
that comprises the contracts of Mudarabah, Tabarru´ (to donate for benefit of others) and
mutual sharing of losses, is made so as to eliminate the element of absolute uncertainty so
far as determination of contributions is concerned. There would be some uncertainty in
even Takaful system but that would be of commercial nature pertaining to the result of
the business conducted by the company. As such there could be only Gharar-e-Yaseer -
greatly minimized and, therefore, acceptable from Shariah standard.
Takaful is not a new concept in Islamic commercial law. Islam accepts the right of
human beings to protect their religion (belief), life, dignitary and honour, property and the
talent. The contemporary jurists acknowledge that the principle of shared responsibility in
the system of ‘Aaqilah’ (kins or the persons of relationship) laid the foundation of
Takaful. Mutual help and indemnification was a custom in some tribes at the time of the
Holy Prophet (pbuh). In case of any natural calamity, every body used to contribute
@

something until the disaster was relieved. Similarly, the idea of Aaqilah in respect of
blood money was based on the concept of Takaful wherein payments by the whole tribe
distributed the burden and the losses. Islam accepted this principle of reciprocal
compensation and joint responsibility.
Main Objective of Takaful

It is one of the means of providing a material safeguard for offspring and is thus
in line with the saying of the holy prophet SAW. He (SAW) spoke to this effect:
"it is better for you to leave your off-spring wealthy than to leave them poor,
asking others for help". The Holy Prophet (SAW) also encouraged the providing
of security for the widows and poor persons as he highlighted in one of his
traditions: "The one who looks after and works for a widow and for a poor
person (dependent), is like a warrior fighting for The Cause of Allah (SWT), or
like a person who fasts during the day and prays throughout the night”.
Visa Debit Card Fee Structure
ATM/DEBIT CARD
Annual Fee
Regular Customers Priority Customers
Primary: Rs. 300 Free for first year
Silver
Supplementary: Rs. 150 Supplementary: Rs. 150
Transactions on DIB ATMs
ATM Balance inquiry Free Free
ATM mini-statement Free Free
ATM cash withdrawal Free Free
Statement of Account
Free Free
Request through ATM
Bill Payment through

Rs. 20/bill Rs. 20/bill
ATM
Transactions on Local Shared Network ATMs
ATM Balance Inquiry 1Link: Free, MNET: Rs. 5 1Link: Free, MNET: Rs. 5
ATM cash withdrawal Rs. 15 Rs. 15
POS and International Transactions
POS transaction fee -
2% of transaction amount, Min: $2 2% of transaction amount, Min: $2
International
Cash withdrawal - 3% or Rs. 300 whichever is higher 3% or Rs. 300 whichever is higher per
International ATM per withdrawal withdrawal
Balance inquiry -
Free Free
International ATM
Misc
Replacement of lost or
Rs. 100 Free
damaged card
PIN replacement Free Free

CHAPTER 6
DIFFERENT SERVICES AT DIBPL

Services Available
Address/Telephone number change:
You can easily change your address and phone number just you have to come into the
bank and fill up the form to change the address or telephone number.
Balance Inquiry:
Balance inquiry can be made at any time via on telephone or just you have to come into
the bank and ask the person sitting at the counter.
Transaction details
All the details of transactions on daily, weekly, monthly and yearly bases are to the
customer on request.
Internal Fund Transfer:
Internal fund transfer is basically the transfer of amount from one account to another
within the same branch or bank. If you have current account as well as saving account,
and you want to transfer the amount from one account to another, you have to just fill up
the internal fund transfer form and the amount will be transferred to your new account.
Account Linking & De-linking:
Linking and De-linking means if a customer has two accounts within the bank and want
to link one account to another then a customer has to fill up a firm for the linking of
accounts. If a customer wants to de-link the accounts, the same procedure will be applied.
Forex Rates:
The board is there in the customer waiting area in which the forex rates are displayed. A
customer can also asked about the rates from the bank.
Hold Mail Service:
The holding of all the details of transactions kept secret by the bank on the request of the
customer. The charge for this service is Rs.500.

Standing instructions:
The standing instructions are also provided to the customer. The charge as per the
instruction is Rs.100.
ATM Services:
The ATM card is provided along with the opening of account. ATM balance inquiry,
ATM mini- statement, ATM cash withdrawal, statement of Account Request through
ATM is free. Customers can also Pay Bills through ATM and the charges for it is Rs.20
per Bill.
Utility Bill Payments:
The bank is not accepting utility bills. A bank can on the standing order of the customer
can accept the bills and deposit it to another bank.
The Bill payment Service Charges is Rs.100 per bill.
Locker Facility:
Lockers are the utility provided by the bank to the customers for their safety use.
The lockers are provided into three ways.
Accounts Related Services
• View Account Statements on ad hoc basis

• View Account Balances
• Receive Account Statement via email
• Download Account Statement in PDF format
• View Term Deposit Details
Customer Related Services
• Register on the Internet without visiting the branch

• Set personal Daily / Monthly online transaction limits
• View Session summary and Account Activity
• Personalize startup and internal pages

Instant Funds Transfer
• Transfer Funds within Dubai Islamic Bank Pakistan

• To your own account
• To someone else’s account
• Inter Bank Funds Transfer
• Utility Bill Payment
Request based services (handled offline)
• Request Demand Drafts

• Request Pay orders
• Request Cheque books
• Request Visa Debit card
• Request opening of Fixed Deposit account
• Request Standing Instructions
Cheque Related
• View the status of processed and pending Cheques

• Block issued Cheques instantly
Consumer Financing
• View Payement history

• View Next Due Installment’s amount and date
• Pay due Installment’s via Internet Banking account
Complaints
• Log a complaint related to any service offered by Dubai Islamic Bank Pk.
• Track the status of a logged complain
Phone Banking
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.
• General Information about
• Account opening information (current, savings & fixed deposit accounts).

• Auto Financing
• Home Financing
• SME
• Please feel free to call us at 111-786-DIB (342) or 009221-111-786-DIB (342) – if
you are calling from abroad

CHAPTER 7
OPERATIONS DEPARTMENT

2-Operations Department
Functions performed:
a) Clearing
b) Remittance
a) Clearing
• Inward clearing
• Outward clearing
Inward Clearing
In the morning, the bank receives its own cheques, which have been presented by the
customers in some other bank to be deposited in their account. NIFT provides the facility
of bringing cheques for inward and also takes the cheques of outward clearing to other
banks. The cheques received in inward clearing are the cheques drawn on bank and the
bank has to pay for them. For this purpose the bank makes clearing in computer by
checking the balances of the respective customer, if their balances are up to the mark then
that cheque is cleared and the respective customer account is debited with the respective
amount. If the balances are short then that cheque is bounced back to the related bank.
Reasons for returning a cheque:
• All required stamps of Clearing, Crossing and Endorsement are not present on
cheques.
• Cheque is post date.
• Refer to drawer
• Effects not cleared, may be presented again
• Amounts in words and figures differ.
If any of these reasons exists then that cheque is returned through NIFT and deducts Rs.
300 from customer’ account as cheque returned charges.
• For this purpose an entry is passed on multi entry voucher like:
• Customer’s Account Dr.
• State Bank of Pakistan Cr.
• Cheque returned charges Dr.
• Other commissions Cr.
• Then the report of returning any cheque is sent through fax to the head office Karachi.
After this put the entry in Cheque return register showing the following columns:

• Date
• Title of account
• Account number
• Cheque number
• Bank and Branch name
• Reason to return
Outward clearing:
All the cheques of other banks which are deposited to DIBPL are presented in outward
clearing. This is said as outward clearing because they are presented on the very next
day after depositing a cheque.
In outward clearing, the entry is made like:
Customer Account Cr.
State Bank of Pakistan Dr.
This entry is made when we come to know about the clearing of all cheques, which are
sent to other banks.
Services Provided
I. Transfer of amount
II. Telling account balances
III. Issuing cheques books
I. Transfer of amount
If a customer holds two accounts in the bank and he/she wants to transfer money from
one account to other account, customer writes a cheque and fills deposit slip in which
he/she writes account number to which amount is to be transferred. After making transfer
entry in the computer, affix transfer stamp in the middle of the cheque, crossing on the
upper left and bank’s endorsement stamp on the backside of the cheque.
II. Telling account balances
Whenever clearing officer receives phone call from the customer inquiring about his/her
account balance after confirming the name, address and other information he
tells the balance through computer.
III. Issuing Cheque Books
It is also the duty of department to issue a cheque book when an officer receives request
from the customer.

B. Remittance
a) Pay order
b) Demand drafts
c) Inward collection
d) Outward collection
a) Pay Order:
Pay order is an order to pay money but this payment is to be made within city. In other
words it can be said that the payee and the payer should be in one city.
In pay order the payment can be made in
A) Cash
B) Clearing
C) Transfer
Procedure:
In case of pay order first of all the customer has to fill a pay order application form in
favoring section: name, account number, amount, beneficiary name, address,
etc.
The data is entered in already set format of pay order in computer and pay order print out
is taken. An authorized person and manager operations are signed pay order.
The original copy of the pay order is given to the customer and carbon copy is kept with
bank for office record.
b) Demand Draft
An order to pay money to the payee who is residing outside the city. DD can be for a
customer who may or may not have an account in the bank but the other person’s account
must be maintained with the bank for which the payer has demanded the DD.
c) Inward Collection
When the bank receives cheques of any other bank from its any branch situated in the
some other city, and then those have been dealt as inward collection.
Procedure
After receiving the cheque, an entry is made in inward collection register and then all
stamps are affixed on the cheque (clearing,
endorsement, IC # stamp) and make outward clearing voucher which shows the following
entry:
Remittance payable Cr.
On the next evening after the delivery of clearing cheques make reversal entry like
Remittance Payable Dr.

Respective Branch Cr.
Also make a fax message to inform the respective branch that we have credited their
account.
Other functions under operations department
Lockers
Lockers operations shall not be permitted under power of attorney of a customer. A

customer wishing to allow another person or agent may be requested to open a new locker
account under joint names and close the existing account.
In offering this facility branches have to be selective and should provide lockers to the
customers whose identity and integrity is
Verified, who should maintain account with the branch and have potential for deposits
and other banking business. It is reiterated
That honesty, creditability and good reputation of the customer is of utmost importance in
the selection of customer for lockers.
Key features
• Available in selected branches
• Available in 3 sizes
• For all eligible Account Holders
• Key security Deposit PKR 3000
Procedure
• Application on Prescribed Form duly filled
• Saving/Current Account with DIBPL
• 02 Passport size Photographs
Cheque Books Handling

• Application for New Cheque Book
Price
Price is simply the amount of money that consumers are willing to pay for a product or
services.

For account holders:
Account
Category Average Monthly Balance
Current Savings
Normal Up to Rs. 250k Up to Rs. 500k
Priority Greater than Rs. 250k Greater than Rs. 500k
In case of remittances:
Schedule of
Normal Priority
Charges
REMITTANCES (FCY)
Inward
If own Bank Free Free
If another Bank Rs. 400+TT/PO/DD Free
Home
Remittances
where beneficiary Free Free
has an account
with us
Foreign
Drafts/Foreign
Mail Transfers
where payment is
made to
0.15%- Minimum Rs. 150 0.15%- Minimum Rs. 150
beneficiaries
before payment
cover is received
to our FCY
account
Outward
Issuance of
Foreign Currency
0.1% Min $10,Max $25 Free
Demand Draft
(FDD)
Foreign
Remittance
Telex/SWIFT Rs. 1,500 or $25 Rs. 1,000 or $20
Charges -
International
Special
SWIFT charges above + Rs. 500 SWIFT charges above
remittances
Cancellation of
Rs. 200+ postage/SWIFT if any Free
FDD

Stop
Payment/Caution $20 $10
Marking of FDD
Duplicate FDD FDD issuance charges FDD issuance charges
Service Charges
for issuance of
Rs. 300 Free
EPRC against
Advance Payment
Sale of Foreign
Free Free
Monies
REMITTANCE (LCY)
Local Demand Less than Rs. 100,000: 0.25%,
Draft-LDD, MTs Min Rs. 100. Above Rs.
and TTs (within 100,000: 0.1%, Min Rs. 200,
network) Max: Rs. 5,000.
2 Free/ month
Less than Rs. 100,000: 0.25%,
LDDs, MTs and Min Rs. 200. Above Rs.
TTs against cash 100,000: 0.1%, Min Rs. 300,
Max: Rs. 5,000.
Telex/SWIFT
Charges - Rs. 500 Free
Domestic
Cancellation of
Rs. 200 Rs. 200
LDD
Pay Order
Issuance from Rs. 100
account
2 Free/ month
Pay order
issuance against Rs. 250
cash
Cancellation of
Rs. 200 Rs. 200
Pay Order
Stop
Payment/Caution
Rs. 500 Rs. 500
Marking of LDD,
PO
Issuance of
Rs. 300 Rs. 300
Duplicate Draft
Issuance of
Duplicate Pay Rs. 300 Rs. 300
order
Note: Correspondent charges where applicable are at actual
To issue letter of credit:

Other Telex/Swift Charges
Letter of Credit -Full Telex/SWIFT

CHAPTER 8
CASH DEPARTMENT
3- Cash Department

The cash department is the most important department of the bank. It receives cash from
customers and then deposits it into the accounts of the customers and maintained
their balances.
Cash Receipt Sections
In this section the cashier was receiving cash. He recorded the cash received with a pay in
slip and other documents (it necessary) and recorded it in the cash receipt register. There
were two separate types of pay-in-slips, which were used for depositing cash, checks, and
drafts. There were prescribed forms in which the information was fed. After filling the
pay-in-slip with the amount, the cash and slip both were received by the cashier who
entered those in the cash register and fixed a stamp on the pay-in-slip. A part of this slip
is given to the customer for his record and other was maintained with the bank.
Cash Payments
The check allotted with a number by the token department is sent to the clearing
officer/passing officer. After the proper verification of the signature of account holder’s,
cash balances and posting of that particular check to the account, the check was passed to
the cashier who ultimately called on the number fixed on the check. The customer bearing
that token number arrived at the counter. The cashier checked out the number and paid
the amount as per checks and entered number and amount in the cashbook maintained
with him.
In cash department following books are maintained.
• Scroll book
• Paying book
• Cash balance book
Scroll Book
When cash is received at the customer it is recorded in the scroll book.
Paying Cash Book
The cashier makes entry in the paying cashbook when cash is paid.
Cash Balance Book
The consolidated figure of receipt and payment of cash is entered in cash balance book.

CHAPTER 9
CREDIT/ FINANCE DEPARTMENT

4- Credit / Finance Department
Islamic Financing for the following:
 Corporate
 SME
 Personal
Personal Financing
Diminishing Musharaka (Islamic Financing)
With Easy Home you can participate with Meezan Bank in a joint ownership of your
property, where the Bank will provide financing up to 85%. On agreement of a monthly
payment to the Bank of which a component is for the use of the home (rent), and another
for your equity share. The total monthly payment is reallocated regularly by the
partnership to reflect your growing equity and to allocate increasing amounts to your
investment. When you have made the full investment, which had been agreed, you
become the sole owner with a free and clear title to the property
.
Easy Home
Easy home works under the Diminishing Musharakah where customer participates with
Meezan Bank in joint ownership.
Easy Home finance is available for:
Purchase
• 3-20 year
• Max. Finance 85%
• Construction
• 2-20 year
• Max. Finance 70%
• Renovation

• 2-7 year
• Max Finance 85%
Replacement
• 3-20 year
• Eligibility
• Pakistani National
• Age 25—65 (till maturity)
• Professional Experience
• Salaried person:
• 2 year of consecutive experience in same industry
• Min salary 20 k per month
•
• Business
• 3 years business experience
• Min. business income Rs 50K per month
• Processing Charges
• Businessmen Rs 12500
• Salaried Person Rs 8500
• (Up to Rs 4 M, 2000 Additional for above)
• Time Frame 3-4 Weeks
• Internet Banking
• Internet Banking allows having access to accounts regardless of where they may be in
the world.
• Key Features
• Balance inquiry
• Statement viewing
• Statement download
• Cheque status
• Cheque blocking
• Pay order request
• Complaint logging and follow-ups
• Funds transfers between own accounts at DIBPL
• Change of address request

• Cheque book request
• Alerts and Notification by E-mail

• Low/High balance alert
• Credit/Debit transaction alert
• Request resolution alert
• Complaint resolution alert
• Future Features
• Alerts by SMS/Fax
• Utility bill payments
• Inter bank funds transfers
• Payment to nominated accounts at DIBPL
• Standing orders for repeated payments
Management Styles in Dubai Islamic Bank
Branch Manager, Mr. Irfan Soofi, has a Permissive style of managing all the
employees. All the employees are very dedicated toward their responsibilities and do
their tasks by full utilization of their abilities. All the employees daily report their tasks to
the branch manager after the working time of the bank.
Operations Manager, Mr. Zahid Abbas has a participative style of managing the
operations team. All the members of this team are willing to do their jobs but require
some support to how to do certain tasks. All members of the Operations Department work
as a team. The efficiency of this team is very good. Mr. Zahid Abbas is a very lenient
person but he is very strict for those who are not fulfilling their duties at time. All the
employees share every thing with him and he always tries his level best to help and
support the person. The operations manager has all the powers to make any decision by
himself. OM also has to report to the branch manager about his work and tasks, which he
performs daily. During my internship program, the DIB inspection officer conducted the
mystery shopping in our branch and Mr.Zahid Abbas very frequently reply to all the
questions, which were put by the officer. He deliberately handled all the objections raised
by the inspection officer.
Mr. Khalid Bin Niaz, Incharge of Cash Department (Head Teller) always ready to handle
any problem faced by any employee of the bank. He is very dedicated toward his work
and duties. There is four persons that work under his supervision, He always seek out
each and every member opinion regarding any problem and solve the problem
collectively. He acts as directive democrat.

Mr.Khurram Butt the Incharge of Customer Relationship Department has a participative
style of managing the customer relationship officers. All the officers know what to do and
how to do, but at sometimes they have to require support from the Incharge. He is cool
minded person having very good personality. All the sales officers are very hard working
and fulfill there tasks or target very easily. This team consists of efficient persons that
always show their commitment to their jobs.

CHAPTER 10
WORK DONE BY ME AT DIBPL

Work Done By Me in DIBPL
Reception
First of all I have I have to assign the duty on reception. My part of work was to welcome
the customers, listening their queries and guide them to proper department. I have filled
their slips regarding cash deposits, auto finance, home finance and remittances. Issue the
token so that the discipline can be maintained.
Mail receiving
Receives the mail coming from outside and enter it in the inward register. There is
• Serial no.
• to which it comes
• who sent it
• date of receiving
• signature of receiver
Mails sent
When the mails were sent to outside then I have to inter first in the outward register. The
stamp is there of the sender bank. There is
• serial no
• date
• to whom it is being sent
• the subject
• Which authority is sending
Enter cheque book and ATM Cards
After that I have to enter the ATM cards and cheque books in the register. After the
signature of receiver its entry is being made in the register. There is
• Serial no
• Name
• account no
• Card no is there.
After that the ATM sheet is signed by the O.M and kept it in the proper file.

Issue cheque books and ATM cards to customers
The ATM cards, cheque books and pin code issued to the customers. First of all
signatures are taken at the register then it is verified and after verification from
responsible authorities it is delivered to the customers.
Work with customer relation officers
I have work with the customer relation officers to know that how the dormant account is
reactive. Cheque book request receiving, Request for the balance inquiry and statements
and changing of address.
Work with sale department
I have work their with sale department to inform the features of accounts in DIBPL to the
customers. How to open an account and what documents can be attached to open different
accounts.
Work With Finance Department
In the finance department what is required and what is the process of receiving an amount
if coming from abroad. How is to operate the ATM while reloading cash. After opening
lock it is switched to administrator. There are two cassettes in it. One for 500 and the
other for 1000 currency notes. There or other two cassettes one is if the cash is rejected
then goes to that box. And the other is if the card is captured then it goes to that box.
There is a roll on which all the transactions are recorded while at the time of withdraw a
cash. The roll is called audit roll. After filling, the nil cash is pressed and lock it. And this
operation should be completed in 7 minutes.

CHAPTER 11
FINANCIAL REPORTS

Financial Highlights
DUBAI ISLAMIC BANK PAKISTAN LIMITED

BALANCE SHEET
AS AT DECEMBER 31, 2009
Note 2009 2008
------ Rupees in '000 -------
ASSETS
Cash and balances with treasury banks 8 2,932,264 2,691,572
Balances with other banks 9 2,430,437 3,273,878
Due from financial institutions 10 2,591,905 1,329,832
Investments 11 2,822,723 3,019,266
Financing 12 20,589,613 18,073,501
Operating fixed assets 13 1,727,298 1,740,923
Deferred tax assets 14 413,066 512,474
Other assets 15 1,861,588 1,408,627
35,368,894 32,050,073
LIABILITIES
Bills payable 16 279,493 283,188
Due to financial institutions 17 125,000 -
Deposits and other accounts 18 27,980,906 25,458,910
25,458,910 - -
Sub-ordinated loans - - - -
Liabilities against assets subject to finance lease - -
Deferred tax liabilities 19 943,230 1,241,848
Other liabilities
29,328,629 26,983,946
NET ASSETS 60,040, 265 50,066,127

EPRESENTED BY
Share capital 20 6,776,030 6,017,780
Reserves 21 45,347 -
Accumulated loss (781,130) (962,520)
6,040,247 5,055,260
Advance against future issue of share capital 22 18 18
Surplus on revaluation of assets – net of tax 23 - 10,849
6,040,265 5,066,127
President / Chief Executive Director Director Director

PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED DECEMBER 31, 2009
Note 2009 2008
------- Rupees in ‘000 -------
Profit / return on financing, investments and
Placements earned 25 3,647,145 2,723,796
Return on deposits and other dues expensed 26 1,805,943 1,377,542
Net spread earned 1,841,202 1,346,254
Provision against non-performing financing 12.4 (115,136) (156,077)

Provision for diminution in the value of investments - -
Bad debts written off directly - -
(115,136) (156,077)
Net spread after provisions 1,726,066 1,190,177
OTHER INCOME
Fee, commission and brokerage income 232,619 142,308
Dividend Income - -
Income from dealing in foreign currencies 129,177 133,573
Gain on sale of securities 27 - 7,499
Unrealized gain / (loss) on revaluation of
Investments classified as held for trading - -
Other income 28 3,557 52,172
Total other income 365,353 335,552
2,091,419 1,525,729
OTHER EXPENSES
Administrative expenses 29 1,724,467 1,791,282
Other provisions / write offs 15 2,251 -
Other charges 30 12,651 6,253
Total other expenses 1,739,369 1,797,535
352,050 (271,806)
Extra ordinary / unusual items - -
PROFIT / (LOSS) BEFORE TAXATION 352,050 (271,806)
Taxation – Current (20,062) -
– Prior years - -
– Deferred (105,251) 89,984
31 (125,313) 89,984
PROFIT / (LOSS) AFTER TAXATION 226,737 (181,822)
Accumulated loss brought forward (962,520) (780,698)

Accumulated loss carried forward (735,783) (962,520)
Basic earnings / (loss) per share – Rupees 32 0.38 (0.35)
Diluted earnings / (loss) per share – Rupees 32 0.38 (0.35)

STATEMENT OF COMPREHENSIVE INCOME
2009 2008
------- Rupees in '000 -------
Profit / (loss) for the year 226,737 (181,822)
Other comprehensive income - -
Total comprehensive income / (loss) for the year 226,737 (181,822)

STATEMENT OF CHANGES IN EQUITY
Statutory Accumulated
Share capital Reserves loss Total
------------------------------------- Rupees in '000 ---------------------------------
Balance as at January 01, 2008
5,126,230 - (780,698) 4,345,532
Net loss for the year - - (181,822) (181,822)
Other comprehensive income - - - -
Total comprehensive loss for the year

- - (181,822) (181,822)
Issue of right shares during the year 891,550 - - 891,550
Balance as at December 31, 2008 6,017,780 - (962,520) 5,055,260
Net profit for the year - - 226,737 226,737
Other comprehensive income - - - -
Total comprehensive income for the year- - 226,737 226,737
Issue of right shares during the year 758,250 - - 758,250
Transfer to Statutory reserves - 45,347 (45,347) -
Balance as at December 31, 2009 6,776,030 45,347 (781,130) 6,040,247

CASH FLOW STATEMENT
Note 2009 2008
------- Rupees in '000 -------
CASH FLOW FROM OPERATING ACTIVITIES
Profit / (loss) before taxation 352,050 (271,806)
Adjustments:
Depreciation 13.2 198,209 197,046
Amortization 29.2 111,574 54,892
Provision against non-performing financing 12.4 115,136 156,077
Liability no longer payable written back - (51,870)
Other provision / write offs 15 2,251 -
Gain on sale of fixed assets (63) (302)
427,107 355,843
779,157 84,037
(Increase) / decrease in operating assets

Due from financial institutions (1,262,073) (1,329,832)
Financing (2,631,248) (6,881,599)
Others assets (507,967) 577,410
(4,401,288) (7,634,021)
Increase / (decrease) in operating liabilities

Bills payable (3,695) (64,333)
Due to financial institutions 125,000 (383)
Deposits and other accounts 2,521,996 9,344,449
Other liabilities (298,618) 803,175
2,344,683 10,082,908
(1,277,448) 2,532,924
Income tax paid (8,319) (9,430)
Net cash (used in) / generated from operating activities (1,285,767) 2,523,494
CASH FLOW FROM INVESTING ACTIVITIES

Net investments in available for sale securities 179,852 (43,548)
Investments in operating fixed assets (259,826) (874,048)
Sale proceeds of property and equipment disposed-off 4,742 64,693
Net cash used in investing activities (75,232) (852,903)
CASH FLOW FROM FINANCING ACTIVITIES

Amount received against issue of right shares 758,250 891,550
(Decrease) / increase in cash and cash equivalents (602,749) 2,562,141
Cash and cash equivalents at beginning of the year 33 5,965,450 3,403,309
Cash and cash equivalents at end of the year 33 5,362,701 5,965,450

NOTES TO THE FINANCIAL STATEMENTS
1. Status and Nature of Business
1.1 Dubai Islamic Bank Pakistan Limited (the Bank) was incorporated in Pakistan as an
unlisted public
Limited company on May 27, 2005 under the Companies Ordinance, 1984 to carry out
the business
of an Islamic Commercial Bank in accordance with the principles of Sharia.
1.2 The State Bank of Pakistan (the SBP) granted a “Scheduled Islamic Commercial
Bank” license to
The Bank on November 26, 2005 and subsequently the Bank received the Certificate of
Commencement of Business from the Securities and Exchange Commission of Pakistan
(the
SECP) on January 26, 2006 and commenced operations as a scheduled Islamic
Commercial Bank
With effect from March 28, 2006 on receiving certificate for commencement of business
from the
SBP.
1.3 The Bank is operating through 35 branches and 1 sub-branch as at December 31, 2009
(2008: 23
branches and 2 sub-branches). The registered office of the Bank is situated at Hasan
Chambers,
DC-7, Block-7 Kehkashan, Clifton, Karachi. The Bank is a wholly owned subsidiary of
Dubai
Islamic Bank PJSC, UAE (the holding Company).

Cash and Balances with Treasury Banks
In hand Note 2009 2008
------- Rupees in '000
- local currency 439,806 302,192
- foreign currency 435,652 248,407
875,458 550,599
With the State Bank of Pakistan in

- local currency current account 8.1 1,517,659 1,804,409
- foreign currency current account 8.2 44,103 9,372
- foreign currency deposit accounts - Cash Reserves 198,979 127,507
- Special Cash Reserve 239,196 153,008
8.1 438,175 280,515
With National Bank of Pakistan in

- local currency current account 56,869 46,677
2,932,264 2691,572

Cash Balances with Other Banks
Note 2009 2008
------- Rupees in '000 -------
In Pakistan
- on current accounts 6,684 5,250
- on deposit accounts 9.1 50,010 1,100,010
56,694 1,105,260
Outside Pakistan
- on current accounts 9.2 1,952,535 2,168,618
- on deposit accounts 9.3 421,208 -
2,373,743 2,168,618
2,430,437 3,273,878

CHAPTER 12
SWOT ANALYSIS

Swot Analysis
Strengths:
• Effective HR Policies.
• ATM Machine in Branches.
• One Counter Operation.
• Islamic Banking.
• Employee Loyalty
• 24/7 Online Banking.
• Internet banking facility.
• Excellent Environment.
• Efficient and Qualified Management.
• Fewer Competitors as Islamic Banking.
• A large range of Islamic Investment Schemes.
• Islamic Leasing System.
• No hidden charges.
• Rates are remarkably low as compared to other banks.
• Very High credit rating.
Weakness:
• Lack of awareness of the people.

• Fewer Branches in Big cities.
• Less Advertisement.
• Online system is not so strong.
Opportunities:
• More and more people are coming towards Islamic Banking System.
• Introduction of innovative products.
• New Market Segments for ijara, i.e. Home Appliances Products.
• Open New Braches in other small areas.

Threats:
• Islamic banks are Increasing.

• Traditional commercial banks are also introducing the Islamic Banking Facility.
• Personal Loan Scheme of other banks.
• New Innovative Schemes by Other Islamic banks
Suggestion & Recommendations
• Expanding their business by establishing new branches in those areas which are near
to the business area.
• MBL has the option to increase its customers through efficient marketing system.
• The bank must hire the efficient marketing personnel.
• MBL must take part in heavy advertisement as the people become aware of the
Islamic banking System.
• Bank should provide management training to their employees.
• Bank should develop healthy relation to their customers.
• MBL should give more compensations and benefits to its employees and other
workers for the improvement in the performance. Because it leads to the improvement
of overall bank’s performance.

Conclusion
Islamic banking is a very young concept. Yet it has already been implemented as the only
system in two Muslim countries; there are Islamic banks in many Muslim countries and a
few in non-Muslim countries as well. Despite the successful acceptance there are
problems. These problems are mainly in the area of financing.
With only minor changes in their practices, Islamic banks can get rid of all their
cumbersome, burdensome and sometimes doubtful forms of financing and offer a clean
and efficient interest-free banking. All the necessary ingredients are already there. The
modified system will make use of only two forms of financing loans with a service charge
and Mudaraba participatory financing both of which are fully accepted by all Muslim
writers on the subject.
Such a system will offer an effective banking system where Islamic banking is obligatory
and a powerful alternative to conventional banking where both co-exist. Additionally,
such a system will have no problem in obtaining authorization to operate in non-Muslim
countries.
Participatory financing is a unique feature of Islamic banking, and can offer responsible
financing to socially and economically relevant development projects. This is an
additional service Islamic banks offer over and above the traditional services provided by
conventional commercial banks.

References
In order to collect data, I used the following modes of research:-

• Personal Observation
• Existing Documents
• Annual Reports of the Organization
• Previous DIBPL Annul reports
Books
• JAEK. SHIM, JOEL G. SIEGEL,
• Managerial Finance,
• Chapter “Financial Analysis”.
Internet
During the preparation of this report I also got the benefit of internet and for this purpose
I used the following sites:
• www.dibpak.com
• www.google.com

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CHAPTER 1

National University of Modern Languages 1

According to another opinion of the historical authorities;

National University of Modern Languages 2

According to Dr. Hart

“Banker or bank is a person or company carrying on business of receiving money and

In the words of G W Gilbert

“A banker is a dealer in capital or more properly a dealer in money. He is an intermediate

1. Central bank or state bank.

National University of Modern Languages 3

National University of Modern Languages 4

National University of Modern Languages 5

National University of Modern Languages 6

INTRODUCTION TO ISLAMIC SECTOR

National University of Modern Languages 7

The government issued an ordinance, which empowered it to investigate all such

National University of Modern Languages 8

Measures Taken To Develop the Banking System in Pakistan

National University of Modern Languages 9

History and Present Status of Islamic Banking around the World

The History of Islamic Banking

Islamic Banking as an Idea

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The Coming into Being of Islamic Banks

At present there are Islamic Banks in the following countries:-

01. Afghanistan 17.Gambia 33.Pakistan

02. Algeria 18.India 34.Palestine

03. Albania 19.Indonesia 35.Philippines

04. Argentina 20.Iran 36.Qatar

05. Australia 21.Iraq 37.Russia

06. Bahamas 22.Jordan 38.Saudia Arabia

07. Bahrain 23.Kazakhstan 39.Senegal

08. Bangladesh 24.KibrisTurkish Republic 40.South Africa

09. Brunei 25.Kuwait 41.Sudan

10. Cayman Islands 26.Lebanon 42.Switzerland

11. Cyprus 27.Liechtenstein 43.Thailand

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13. Djibouti 29.Malaysia 45.Turkey

14. Egypt 30.Mauritania 46. U.A.E.

15. Germany 31.Morocco 47. U. K.

16. Guinea 32.Niger 48. S. S. A.

Problems faced by Islamic banking in the world.

The problem of forward contact/booking of foreign currency.

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Unfamiliarity with the Islamic Banking System

The Regulatory environment

National University of Modern Languages 13

Use of Advanced Technology and Media

Need for Professional Bankers

Blending of Approach of Islamic Scholars with the Approach of the

Bankers, due to the nature of their jobs have to be pragmatic or application-oriented.

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National University of Modern Languages 15

Riba (Interest) is strictly prohibited in all its forms and kinds.

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National University of Modern Languages 18

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