Presented by:1. Abbas Khozema Mandviwala (13210)2. Muzammil Mehboob Paracha (12055)

IntroductionAl Baraka Bank (Pakistan) Limited is the result of a merger

between Al Baraka Islamic Bank Pakistan and Emirates Global Islamic Bank. The merged entity commenced operations on November 1st 2010.

With assets of more than Rs. 80 billion; a workforce of 1400 professionals and a network of 94 branches in 42 cities and towns across Pakistan.

Al Baraka Bank (Pakistan) Limited, offers a wide array of Islamic financing products such as Murabaha, Ijarah, Musharakah and Islamic Export Refinance etc., catering to a diverse cross-section of the economy including the Corporate, SME and Consumer sectors.

Assets ManagementMain Purpose of Finances in ABPL

Working Capital FinanceProject financeTrade FinanceReal Estate FinanceConsumer financing

InvestmentTypes of Investments in ABPLSukuk/Bond CertificatesOrdinary sharesMutual funds

Sukuk certificates/Bonds Ordinary shares Mutual funds0

5000000

10000000

15000000

20000000

25000000

30000000 27224619

28754

Islamic Financing and Related Assets

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,00014,536,623

5,911,172

3,449,6892,871,228

2,160,057

458,000 164,993 28,814

IN THOUSAND

MurabahaFeature

Variable tenors

Fixed term

Predetermined profit.

Bank buys a specific asset that the customer wants, and after having owned it and becomes its property, it sells to the customer at the buying price plus a profit at a rate agreed at the time of entering into the contract.

Most Popular form of Murabaha is commodity Murabaha

Application of Murabaha in ABPL Working Capital Finance: This includes financing the import of goods or the

purchase of such goods from the local market as well as other short-term financial services. It mainly used to provide stock to the companies.

Trade Finance: These facilities include different modes of finance, documentary letters of credit, letters of guarantee etc. which are offered to exporters and importers.

USE OF MURABAHA IN EXPORTIn case of Pre-shipment, normal procedure as

adopted in local Murabaha

In case of post-shipment, Murabaha can not be executed for goods already exported. However, Murabaha can be executed for fresh purchases required for next shipment against assignment of receivables for first shipment.

Murabaha LC for Import Financing

The customer submits an application to the bank to open a letter of credit for the purchase or import of goods, indicating that it wants to buy the goods from the bank upon arrival on a Murabaha basis.

The bank will open a letter of credit accordingly, and the price will be paid by the bank in its capacity as the buyer of the goods.

Upon the arrival of the goods, the bank sells them to the customer on a Murabaha basis at an agreed price which includes the cost of goods, a profit and service fees. 

Diminishing MusharakaIn ABPL Diminishing Musharaka is being used in:

Purchase of HouseRenovation of HouseConstructionPlant and machinery financingAgriculture land financingFactory/Building financing

Features of Diminishing Musharaka1. Client makes the choice in approve area

of bank2. Bank & Client enter into Musharaka

agreement3. The property will be in the name of the

client4. The bank rent out his share to the client

through Ijarah agreement5. Rent is fixed on prevailing market rate

SalamSalam sale is use to finance agricultural

operations

Salam sale is also used to finance the commercial and industrial activities, especially in phases prior to production and export of commodities and that is by purchasing it on Salam and marketing them for lucrative

Car IjarahUnder this arrangement, the Bank will purchase a vehicle and give it to you for use for a specific period of time on monthly rental. You may buy the vehicle against your security deposit after completion of Ijarah tenure, upon payment of all due rentals.

Letter of Credit1. The customer requests the bank to open a letter of credit

according to certain conditions (the terms of the customer's original deal with the supplier).

2. The bank requests the customer to deposit a sum of money to a maximum equivalent to the price of the goods to be purchased or imported, to cover the amount of the letter of credit.

3. Based on this, the bank opens the letter of credit.  The settlement of the letter of credit is effected by utilizing the amount of the margin deposited by the customer. The documents received under the letter of credit are then sent to the customer.

4. The bank charges fees for its services. 

Liability ManagementAll the deposits of the banks and the

investment made by the bank on behalf of clients are part of liability to them.

It includes current accounts, savings accounts, Musharakah deposits, Mudarabah deposits, and other facilities.

The ABPL accounts are based on the Islamic concept of Mudarabah.

Liability Management 1. ABPL Current Account Salient features:

Available in PKR, USD, GBP, EURO & AED. Free from any minimum balance charges. Unlimited deposits and withdrawals. Free ATM card with access to more than 3800 ATM, nationwide. 24/7 Phone Banking  

The ABPL current account is based on the Islamic principle of Qarz, whereby the customer is the lender and the bank is the borrower. Your funds are invested with utmost care in halal business ventures only, and are payable, on demand, with neither any addition and/or penalty.

Liability Management2. ABPL PLS Savings Account

Salient features:

Available in PKR, USD, GBP, EURO & AED.Free from any minimum balance charges.Profit is calculated on monthly average basis.Profit will be paid every month.Unlimited deposits and withdrawals.Enjoy higher profits on higher balances.24/7 Phone Banking.

Liability Management3. ABPL Khazana Account4. ABPL Mahana Amadani Account5. Al Baraka Business Plus Account6. Sarparast Family Takaful Plan7. Rahnuma Travel Services8. Safe deposit lockers

Investments

1. Mudarabah Investment

This Mudarabah investment account enables customers to deposit specific sums of money with the bank throughout the year for specific periods of time (one month, 3 months, 6 months, 9 months or 12 months) with the option to withdraw profits at specific times.

The bank will invest these funds and the profits will be shared between the bank and the customer in accordance with the agreement signed between the two parties and the provisions of Islamic Shariah.

Joint Investment Accounts

Holders of these accounts enter into Mudaraba contracts, whereby depositors are jointly considered as owners of funds while the Bank is considered as Mudarib.

The depositors authorize the Bank to select suitable investments and projects. Profits are divided according to prior agreement between the two parties. The loss (if any) shall be by borne by investing depositors, in proportion to contribution (including the Bank's contribution, if any) unless the Bank is negligent or in violation of the terms. Banks are unique in that they deduct administrative expenses from their own share and do not deduct them from the gross income as Mudaraba expenses.

Specific Investment Accounts

In these accounts, the account holders enter into a specific Mudaraba contract.They select investment channels, that is, commodities, funds managed by the bank, projects, sectors and even countries of their choice to invest in. Only well researched projects are offered for investment.

Liquidity ManagementIt is necessary for the bank to maintain its

liquidity. At the time of withdrawal by depositors from the banks, the bank must have ready cash to pay to them.

The bank diversifies their portfolio of assets into investment, where they can earn high profit. They also keep maintenance of liquidity investment.

Current practices of control byAl Baraka

Deposit Management.Choice of Mode of Finance (short term-

Istisna, Salam) Maturity Matching. Mixing of Deposits. Maintaining cash reserves.

Al Baraka bank manages liquidity via its Asset and Liability Committee (ALCO) process.

The committee decides on mixing of asset and liabilities, makes agreement about liquidity and profit rate risk limits, expresses bank profit rate view and determines the bank business strategies. Bank has established frame work for liquidity management with asset and liabilities management policies and treasury policy forming the fulcrum for procedures, process and structure.

It has a major objective of the bank of protecting the banks net profit income in the short run and market value of the equity in the long run for enhancing share holders wealth

JAZAK ALLAH