Internship Report Repaired)

Submitted to: Mr.
Nazik Hussain
(Incharge internship and placement)
Submitted by: Khadija hina
Roll number 117
BBA 6th (EVE)
DEPARTMENT OF MANAGEMENT SCIENCES
THE ISLAMIA UNIVERSITY OF BAHAWALPUR
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PREFACE
Practice makes man perfect. Theoretical knowledge is not enough. It is useful

when it is implemented. That’s why it is necessary for completion of BBA program to do
some practical work in any organization internship program is held in every
management institution.
Banking play very important role in the commerce and economic development of
a country. Now-a-days banks are using different modern technologies, which influence
the managerial activities, that’s why I decided to do my internship Training in the bank.
I do six weeks internship in BANKISLAMI LIMITED circular road branch. During
my whole time I was visited through different departments and was thoroughly briefed
about the procedure and working by friendly senior staff of there.
This report is specially meant for the student of BBA(Hons). It includes brief
study of the operation, Function, tasks and services of BIPL.
In preparation of this Report is have tried my best to provide all Possible
information about the operation, function and tasks of ABL in brief and comprehensive
form. It also includes a brief view of my work during internship. I have also tried my best
to use simple and easy words and language.
Internship report ends with some recommendations after identification of
problems that I observed during my internship.
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ACKNOWLEDGEMENT
“To Him belongs the dimension of the heaven and earth, it is He who gives life and
death and He has power over all things.”
I offer my humblest thanks to ALMIGHTY ALLAH, The most Beneficent and the
Most Considerate and the entire source of all knowledge and wisdom. I thank
ALMIGHTY ALLAH, who gave me the aptitude to do this internship efficiently and
successfully . I faced a lot of difficulties during this period of developing internship
report. But Allah gave me a lot of patience and due to the continuous
encouragement of my parents and other people concerned, I was able to complete
this work. I offer my humblest respects to the HOLY PROPHET HAZRAT
MUHAMMAD (Peace Be upon Him) who is, forever a torch of guidance and
knowledge foe human being as a whole.
I express my greatest thanks to my supervisor Mr. Asad mehmood, for his
continuous encouragement, vivacious supervision, useful suggestions and kind
behaviour throughout my internship. His enthusiasm shows the way forward to me
to achieve this success.
I am thankful to all staff members of BIPL who really helped me and guide me
throughout my internship.
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DEDICATION
Dedicated to HAZARAT MUHAMMAD (Peace Be Upon Him)Who is forever torch of

guidance And Knowledge for humanity as a whole. Moreover I dedicate my efforts to
my parents who pray for me every minute and who guide me at every step of my life,
my classmates and my group fellows who stand by me whenever I need them and to all
those who help and encourage me whenever I find hurdles in my life.
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Table of contents
EXECTIVE SUMMARY……………………………………………………………
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Executive summary:
Pakistan at the time of independence did not inherit a strong banking industry and after
that number of events occurs in banking industry most important one is nationalization
of bank in 1970s. Now it has been growing over the past few years because of
consistent government policies implemented by the state bank of Pakistan including the
privatization of bank.
Islamic banking was introduced in 1973 in Egypt and in 1979 in Pakistan. Bankislami is
the second full fledged commercial Islamic bank. Bankislami is growing rapidly. It has
102 branches in 49 cities and in very short period of time they open more than 100
branches in different cities. I did 6 weeks internship in BIPL and feel pride that I got
opportunity to work in such a reputable islamic bank of a country. During my internship
program I try my level best to gain all useful knowledge of bank.
This reprt is result of that internship program. I have tried best to cover all topics. Report
begin with introduction of banking, then I gave brief overview of Islamic banking in
different countries. 2nd part of report include brief overview of bankislami, its vision,
mission, objectives, corporate structure, products and services, and various
departments in BIPL.Third part includes financial and SWOT analysis. In the end I have
suggested recommendations for improvement and annexure are also here.
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1. INTRDUCTION TO BANKING:-
History of bank is as old as human society. Forever since man came to realize the
importance of money as medium of exchange, the necessity of a controlling or
regulating agency or institution was naturally felt.
The work ‘BANK’ is derived from the word ‘BANCUS’or ‘BANQUE’which means a
bench. Other authorities hold the opinion the word ‘BANK’ is derived from the German
word ‘BACK’ which means “joint stock fund”. Later on, when the Germans occupied
major part of Italy, the word “BACK” was Italianized into ‘BANK’.
Modern banking system was introduced into the Muslim countries at a time when they
were politically and economically at low ebb, in the late 19th century. The main banks in
the home countries of the imperial powers established local branches in the capitals of
the subject countries and they catered mainly to the import export requirements of the
foreign businesses. The banks were generally confined to the capital cities and the local
population remained largely untouched by the banking system. The local trading
community avoided the “foreign” banks both for nationalistic as well as religious
reasons. However, as time went on it became difficult to engage in trade and other
activities without making use of commercial banks. Even then many confined their
involvement to transaction activities such as current accounts and money transfers.
Borrowing from the banks and depositing their savings with the bank were strictly
avoided in order to keep away from dealing in interest which is prohibited by religion.
With the passage of time, however, and other socio-economic forces demanding more
involvement in national economic and financial activities, avoiding the interaction with
the banks became impossible. Local banks were established on the same lines as the
interest- based foreign banks for want of another system and they began to expand
within the country bringing the banking system to more local people. As countries
became independent the need to engage in banking activities became unavoidable and
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urgent. Governments, businesses and individuals began to transact business with the
banks, with or without liking it. This state of affairs drew the attention and concern of
Muslim intellectuals. The story of interest-free or Islamic banking begins here. In the
following paragraphs we will trace this story to date and examine how far and how
successfully their concerns have been addressed.
1.1 What is bank?
There are many definitions of the word "bank" even the standard encyclopedia and law
books find it difficult to state exactly what a bank is. There have been many attempts by
different writers to explain the exact significance of the term “bank”.
Here some of the definitions are quoted as follows.
According to Negotiable Instruments Act (1881) defines:-

“Bank is an institution transecting the business of accepting, for the purpose of lending
or investment, of deposits of money from the public repayable on demand or otherwise
And withdraw able by cheques, draft order or otherwise and includes any post office
saving bank”
According to Banking Companies Ordinance 1962 defines:-

“Banking means the accepting for the purpose of lending or investing of deposits of
money fromthe public repayable in demand or otherwise and withdrawble by cheques,
draft order or otherwise”.
According to Kent:-
“An organization whose principle operations are concerned with the accumulation of the
temporarily idle money of the general public for the purpose of advancing to others for
expenditures.”
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According to Dr. Harts
“A banker is one who in the ordinary course of his business, receives money which he
repays by honouring cheques of persons from whom or on whose account he received
it.”
So the comprehensive definition of bank is:
A bank is a financial institution, which deals with money and credit. It accepts deposits
from individuals, firm and companies at a lower rate of interest and gives at a higher
rate of interest those who need them. The difference between the terms at which it
borrows and those at which it lends from the source of it profit. A bank, thus, is a profit
earning institution.
1.2 What is Islamic banking?
Islamic banking refers to a system of banking or banking activity that is consistent with
the principles of Islamic law (Shariah) and its practical application through the
development of Islamic economics. Shariah prohibits the payment of fees for the renting
of money (Riba, usury) for specific terms, as well as investing in businesses that provide
goods or services considered contrary to its principles (Haraam, forbidden). While these
principles were used as the basis for a flourishing economy in earlier times, it is only in
the late 20th century that a number of Islamic banks were formed to apply these
principles to private or semi-private commercial institutions within the Muslim
community.
1.3 Importance of Islamic Banking:-
Banks play very important role in the economic life of a nation. The growth of the
economy is dependent upon the soundness of its banking system. Although banks do
not create new wealth but borrow, exchange and consume. These make generation of
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wealth. In this way they become most effective partners in the development of that
country.
Islamic Banking brings economic empowerment to Muslims in the areas of operation.

It helps Muslim businesspersons, through financial aid, to remain competitive. It also
leads towards the creation of job opportunities for Muslims as well as Non-Muslims.
It is a basis for expansion into the Islamic Economic System since the establishment
of each Islamic Bank is also the creation of another bank to co-operate with others in
the International web of Islamic Banks. Thus also creating a link for international
interests.
It provide investor with flexibility in types of accounts with in which they could channel
their investment. It thus links capital to labor and reduces expenditure, to levels, related
with the type of investment, the value thereof and its period.
Islamic Banks enable the saving of monetary resources for the future as shown by the
Yusuf(A.S.) and in a methodology approved by Allah. This thus leads to the protection
of wealth.
Sponsoring Islamic activity & the mobilization of resources for International Islamic
Support - not only investment, but moral as well, i.e. relief towards Muslim refugees and
victims of war, etc.
Islamic Banks facilitate international and local trade, provide foreign exchange services
and profitably invest the Muslim fraternity's surplus wealth in conformity to Islamic
principles through economically acceptable development and social projects
indispensable for the Muslim.
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1.4 About Islamic Banking:
Evolution of Islamic banking:
The first modern experiment with Islamic banking was undertaken in Egypt under cover,
without projecting an Islamic image, for fear of being seen as a manifestation of Islamic
fundamentalism which was anathema to the political regime.
• The pioneering effort, led by Ahmad El Najjar, took the form of a savings bank
based on profit-sharing in the Egyptian town of Mit Ghamr in l963. This
experiment lasted until l967 (Ready l98l), by which time there were nine such
banks in the country. These banks, which neither charged nor paid interest,
invested mostly by engaging in trade and industry, directly or in partnership with
others, and shared the profits with their depositors (Siddiqi l988). Thus, they
functioned essentially as saving- investment institutions rather than as
commercial banks.
• The Nasir Social Bank, established in Egypt in l97l, was declared an interest-free
commercial bank, although its charter made no reference to Islam or Shariah
(Islamic law).
• The IDB was established in l974 by the Organization of Islamic Countries (OIC),
but it was primarily an inter-governmental bank aimed at providing funds for
development projects in member countries. The IDB provides fee- based
financial services and profit-sharing financial assistance to member countries.
The IDB operations are free of interest and are explicitly based on shariah
principles.
• The first private interest-free bank, the Dubai Islamic Bank, was also set up 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 the Sudan. In the same year the Kuwaiti government set up
the Kuwait Finance House.
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• In 1979, the Bahrain Islamic Bank came into being.
Islamic banking operations are not limited to Arab soil, or Islamic countries, but are
spreading throughout the world. One reason is the "growing trend toward transcending
national boundaries, and unifying Muslims into a political and economic entity that could
have a significant impact on the pattern of world trade. ...Since Muslims are inclined to
follow Islamic traditions, there is a tendency to establish an Islamic economic system in
every Islamic nation. .. and to restore Shariah Law as the basic source for legislation"
Islamic banking is no longer confined to concepts and ideas only. The Islamic banking
and financial framework has developed into a full-fledged system and discipline. The
concept has become clear to a great extent by now as to what are its basic
requirements for compliance with Shariah. The earliest Islamic bank raced serious
challenges ranging from general suspicions about their viability to a common mistrust
about their intentions. Since then, the Islamic banks have been steadily growing to a
remarkable level at this stage. During the last decades, financial instruments used by
Islamic bank have developed significantly, both on assets and liability sides. Many
instruments have been developed to mobilize financial surpluses. A number or Islamic
banks have launched investment instruments in the form of certificates with short-term
maturities or have established funds earmarked for certain investments. Accordingly,
Islamic financial institutions are operating at present in one form or the other, in around
70 countries of the world.
Islamic banking in Asia pacific region:
The Asia-Pacific region was not oblivious to the winds of change. The Philippine
Amanah Bank (PAB) was established in l973 by Presidential Decree as a specialized
banking institution without reference to its Islamic character in the bank's charter. The
establishment of the PAB was a response by the Philippines Government to the Muslim
rebellion in the south, designed to serve the special banking needs of the Muslim
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community. However, the primary task of the PAB was to assist rehabilitation and
reconstruction in Mindanao, Sulu and Palawan in the south (Mastura l988). The PAB
has eight branches located in the major cities of the southern Muslim provinces,
including one in Makati (Metro Manila), in addition to the head office located at
Zamboanga City in Mindanao. The PAB, however, is not strictly an Islamic bank, since
interest-based operations continue to coexist with the Islamic modes of financing. It is
indeed fascinating to observe that the PAB operates two 'windows' for deposit
transactions, i.e., conventional and Islamic. Nevertheless, efforts are underway to
convert the PAB into a full-fledged Islamic bank (Mastura l988).
In Malaysia:
Islamic banking made its debut in Malaysia in l983, but not without antecedents. The
first Islamic financial institution in Malaysia was the Muslim Pilgrims Savings
Corporation set up in l963 to help people save for performing hajj (pilgrimage to Mecca
and Medina). In l969, this body evolved into the Pilgrims Management and Fund Board
or the Tabung Haji as it is now popularly known. The Tabung Haji has been acting as a
finance company that invests the savings of would-be pilgrims in accordance with
Shariah, but its role is rather limited, as it is a non-bank financial institution. The success
of the Tabung Haji, however, provided the main impetus for establishing Bank Islam
Malaysia Berhad (BIMB) which represents a fullfledged Islamic commercial bank in
Malaysia. The Tabung Haji also contributed l2.5 per cent of BIMB's initial capital of
M$80 million. BIMB has a complement of fourteen branches in several parts of the
country. Plans are afoot to open six new branches a year so that by l990 the branch
network of BIMB will total thirty-three (Man l988).
Other countries:
Some Islamic financial institutions established in countries where Muslims are a

minority.
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• There was a proliferation of interest-free savings and loan societies in India
during the seventies (Siddiqi l988).
• The Islamic Banking System (now called Islamic Finance House), established in
Luxembourg in l978, represents the first attempt at Islamic banking in the
Western world.
• There is also an Islamic Bank International of Denmark, in Copenhagen, and the
Islamic Investment Company has been set up in Melbourne, Australia.
Islamic banking in Pakistan:
In most countries the establishment of interest-free banking had been by private

initiative and were confined to that bank. In Pakistan, however, it was by government
initiative and covered all banks in the country.
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1.5 Story of riba free banking in Pakistan:
1947:
The inception of Pakistan as the first Islamic Republic created in the name of islam.
1949:
The objective resolution was adopted by the first constituent assembly based on the
ideaology of sovereign Islamic state. This was the first stop in the conception towards
Pakistan’s constitution.
1956:
The first Constitution defined Islam as the State Religion and all laws to be according to
the injunctions of the Quran and Sunnah.
1962
The establishment of Council of Islamic Ideology (CU) was followed by the conception
of the second constitution of Pakistan.
1973 :
The third constitution of Pakistan was passed allowing comprehensive legislation on

Islamic principles and establishment of Federal Shariat Court.
1979:
The gradual process of implementation of Islamic banking in Pakistan began in

February 1979 after several years of study and preparation by the government-
appointed Council of Islamic Ideology (CII), when the president of Pakistan announced
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that interest was to be removed from the economy within a period of 3 years. [22] Three
of the specialized credit institutions the House Building Corporation, National
Investment Trust, and Mutual Funds of Investment Corporation of Pakistan were to
remove interest from their financing operations immediately.
1981:
The governments took steps in 1981 to introduce interest-free banking. In Pakistan,

effective 1 January 1981 all domestic commercial banks were permitted to accept
deposits on the basis of profit-and-loss sharing (PLS). Separate Interest-free counters
started operating in all the nationalized commercial banks, and one foreign bank (Bank
of Oman).
1985
New steps were introduced on 1 January 1985 to formally transform the banking system
over the next six months to one based on no interest. From 1 July 1985 no banks could
accept any interest bearing deposits, and all existing deposits became subject to PLS
rules. Yet some operations were still allowed to continue on the old basis.
1999-2001
The procedure adopted by banks in Pakistan since July 1 1985, based largely on ‘mark-
up’ technique with or without ‘buy-back arrangement’, was, however, declared un-
Islamic by the Federal Shariat Court (FSC) in November 1991. However, appeals were
made in the Shariat Appellate Bench (SAB) of the Supreme Court of Pakistan. The SAB
delivered its judgment on December 23, 1999 rejecting the appeals and directing that
laws involving interest would cease. The government sets up a high level commission,
task forces and committees to institute and promote Islamic banking on parallel basis
with conventional system.
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The State Bank issued detailed criteria in December 2001 for establishment of full-
fledged Islamic commercial banks in the private sector. The Shariah Supervisory Board
is established at Al-Meezan Investment Bank led by Justice (Retd.) Muhammad Taqi
Usmani as chairman.
2002
Al Meezan Investment Bank received the first Islamic commercial banking license from
SBP in January 2002 and the Meezan Bank Limited (MBL) commenced full-fledged
commercial banking operation from March 20, 2002. The year 2002-2003 witnessed
strengthening measures taken in the areas of banking, non-bank financial companies
and the capital markets.
2004
The State Bank establishes a dedicated Islamic Banking Department (IBD) by merging
the Islamic Economics Division of the Research Department with the Islamic Banking
Division of the Banking Policy Department. A Shariah Board has been appointed to
regulate and approve guidelines for the emerging Islamic Banking industry. The
Government of Pakistan awards the mandate for debut of international Sukuk (Bond)
offering for USD 500 million. The offering is a success and establishes a benchmark for
Pakistan.
2005
Two other Islamic banks were issued license in 2005: al Baraka islami bank which is a
foreign bank that converted to Islamic banking and bank islami Pakistan, which was
licensed on march 31, 2005.in addition there are 29 Islamic banking branches of
conventional banks opertating in the country.
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2006
Mar 2006 - BankIslami launched its first branch as a full fledged Bank, the second
bank in , in after getting License from the State Bank of .BankIslami Pakistan Limited is
a leading Authentic Islamic Bank in Pakistan, offering truly & fully Shariah Compliant
financial products. BankIslami launched its first branch as a full fledged Islamic Bank,
the second Islamic bank in Pakistan, in March 2006 after getting Islamic Banking
License from The State Bank Of Pakistan.
2007
In 2007 ABN AMRO opened an Islamic branch, Emirates Global Islamic Bank has
started a dedicated Islamic commercial bank and QATAR Islamic bank has confirmed
plans to setup a Shari’ah compliant banking unit soon. Citibank was another big foreign
entry. As on December 31, 2007 there were six full-fledged licensed Islamic banks
having 185 branches. In addition, 12 commercial banks are offering Islamic banking
services through 103 branches.
2008
The financing and investment portfolio of local Islamic banks reached Rs. 185 billion in
December 2008 compared to Rs. 137.6 billion in December 2007. Market share in the
overall banking increased to five per cent at end December 2008 compared with four
per cent at end December 2007. Total assetsof Islamic banking reached Rs. 271.1
billion in December 2008 compared to Rs. 205.2 billion in December 2007.
1.6 The Current Picture of Islamic Banking in Pakistan
Today there are 7 full fledge licensed Islamic bank and 12 conventional banks have
licenses to operate dedicated Islamic banking branches. All of the five big banks in
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Pakistan are providing Islamic banking services. Islamic Banking's share grows to over
5.5% of the total Banking industry
The names of the seven Islamic banks are:
• Meezan Islamic Bank,
• Al-Baraka Islamic Bank,
• Dubai Islamic Bank,
• Bank Islami Pakistan Limited,
• Emirates Global Islamic Bank Limited
• First Dawood Islamic Bank
• Bank alfalah limited
1.7 Difference between Islamic banking and conventional banking:
One must refrain from making a direct comparison between Islamic banking and
conventional banking (apple to apple comparison). This is because they are extremely
different in many ways. The key difference is that Islamic Banking is based on Shariah
foundation. Thus, all dealing, transaction, business approach, product feature,
investment focus, responsibility are derived from the Shariah law, which lead to the
significant difference in many part of the operations with as of the conventional
The foundation of Islamic bank is based on the Islamic faith and must stay within the
limits of Islamic Law or the Shariah in all of its actions and deeds. The original meaning
of the Arabic word Shariah is 'the way to the source of life' and is now used to refer to
legal system in keeping with the code of behavior called for by the Holly Qur'an (Koran).
Amongst the governing principles of an Islamic bank are:
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* The absence of interest-based (riba) transactions;
* The avoidance of economic activities involving oppression (zulm)
* The avoidance of economic activities involving speculation (gharar);
* The introduction of an Islamic tax, zakat;
* The discouragement of the production of goods and services which contradict the
Islamic value (haram)
The fundamental difference between Islamic banks and the existing commercial banks
is the avoidance of riba in Islamic banking. Islamic banks are also universal or multi
purpose banks and not purely commercial banks - a cross-breed between commercial
banks and investment banks, investment trusts and investment-management
institutions. Since the Islamic bank would share in the risks of the consignment, venture,
business or indemnity, it would need to be more careful in the evaluation of applications.
The activities of the bank will be based on the commercial transactions allowed in Islam,
including mudarabah, ijara, bai bi-thamin ajil and murabahah.
The objectives of these Islamic banks in general have been to promote, foster and
develop the application of Islamic principles, law and tradition to the transaction of
financial, banking and related business affairs. The main principles followed by the
Islamic banks are:
(a) Prohibition Of interest in all forms of transactions;

(b) undertaking business and trade activities on the basis of legitimate profits; and
(c) giving zakat.
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Where the normal banking practices do not clash with the Islamic principles, the
Islamic banks have adopted the current banking practices. Where any clash arises, the
lslamic banks have devised their own practices and procedures to accomplish their
banking activities. In some cases a Shariah Advisory Committee is constituted to advise
the bank on the operations of the banking business in order to en sure that they do not
involve any element which is not approved by the religion of Islam.
In Islamic banking on the assets side, investments can be undertaken using profit
sharing
modes of financing (Mudarabah and Musharakah) and fixed-income modes of financing
like
Murabahah (cost-plus or mark-up sale), installment sale (medium/long term
Murabahah),
Istisna„/ Salam (object deferred sale or prepaid sale) andI jarah (leasing). The funds are
provided only for such business activities which are Shariah compatible, but in the case
of commercial banking on asset side banks provide the facilities of running finance,
cash finance, agriculture finance etc which all are interest based and pre determined
rate of interest is being charged from them.
In Islamic banking on the liability side, deposits can be made either in current
accounts or in investment accounts. The former is considered in Islamic banks as Qard
hasan (interest-free loan) or Amanah(trust). These have to be fully returned to
depositors on demand. Investment depositors are rewarded on the basis of profit and
loss sharing (PLS) method and these deposits share the business risks of the banking
operations. Using profit sharing principle to reward depositors is a unique feature of
Islamic banks. This feature along with the different modes of financing and the Shariah
compliant set of business activities change the nature of risks that Islamic banks face. In
conventional banking on liability side deposits can be made in term deposit, current
deposit, saving deposit , on saving and term deposit the account holder gets the fixed
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rate of interest every month or annually but the treatment of current account is as like of
Islamic banking
Moreover Islamic banks receive two types of deposits:
(a) Deposits not committed for investments which take the form of current accounts or
savings accounts; and
(b) Deposits committed for investment which are called investment accounts.
The current account is operated in the same way as it is operated in the conventional
banking system, but the saving accounts and investment accounts are operated
differently.
1. saving accounts
This is an account where customers can deposit their savings. Though the depositors
allow the bank to use their money, they get a guarantee of getting the full amount from
the bank. The bank guarantees their savings but is not obliged to pay any rewards to
the savers. Some banks, however, may pay cash rewards from their profits at the end of
the financial year or give some privilege to the holders of these accounts as for example
providing financial assistance for small projects.
2. Investments accounts
The account holder authorises the bank to invest the money in any of its projects and
after the expiry of the specified period the account holder will get an agreed share of the
profits. The facilities that are provided by the Islamic bank will in general be similar to
those provided by other commercial banks. Its customers can maintain current accounts
and deposit accounts, however no interest is payable. In addition customers can deposit
their
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moneys in the investment accounts in which the profits and the loss will be shared with
the bank.The Islamic bank can also provide services for the transmission and transfer of
money, the purchase and sale of currency and the financing of trade documents, for all
of which theIslamic bank can charge commissions.
In addition, the Islamic banking business provided by the bank includes the methods of
mudarabah, musharakah, bai bi-thamin ajil, murabahab, wadiah and ijara.
The other differences are,
a) Relationship:-
Basically the relationship between Islamic Bank and its customers is not of debtor and
creditor, but it is something of sharing risk and rewards. So the relationship emerges as
Mudarib and Rabbul Maal. This basic assumption leads to the following two things.
• No predetermined fixed return on customer’s deposits.

• No liability on the part of Islamic Bank being Mudarib to owners of deposits
(Rabbul Maal) to return their funds in full on demand except the deposits in
current account and provided the Bank has not been negligent in investing the
funds to earn profit.
b) Sharing Profit/Loss:-
Islamic Bank share profit in pre-determined and declared ratio and the capacity of
Mudarib and in case of loss they sacrifice the management services rendered for
operational activity. Islamic Bank, however, shares the loss on investment of its equity.
This ensures justification equity and equality for correct payment of profit or sharing
loss.
c) Finances to customer:-
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Unlike conventional bank, Islamic Bank does not allow cash loans. Islamic Bank
invests funds either through participation (Musharka / Mudarbah) or in the form of
Islamic Instrument like Murabaha and Ijarah Funds and other Islamic compliant mode of
financing.
d) Multi-purpose bank:-
Islamic Bank deals in short term, medium term and long-term investment in various
modes of financing including equity participation. So it is a multi-purpose Bank,
functions as commercial as well as investment bank and plays the role of Non-Banking
Financial Institution (NBFI).
e) use of financial resources
Islamic Banks uses the financial resources in productive activities thereby developing
society as a whole, while conventional Bank attracts financial resources and lends them
without directing towards business or productive preposition to earn profit. Although the
profit is also kept in mind by Islamic banking too but the same is not the main objective.
f) Equity base banking:-
Islamic Banking is basically equity based as funds are employed in shirkah to share
profit, while the conventional has no concern to this effect. It only places funds at the
disposal of the borrower for a fixed return.
g) Value Oriented:
Islamic Banking system is value oriented while conventional banking system is value-
neutral. Islamic Bank shares profit earned by the Bank’s Funds while Conventional
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Bank has no concern with the generation of income or sustaining loss by utilization of
funds.
h) Review & Audit:-
Islamic Bank is required to be viewed by Shariah audit in addition to the normal
audit, while the conventional bank is satisfied with statutory audit only.
It is important to mention that the Shariah does not prohibit all gains on capital. It is
only the increase stipulated or sought over the principal of a loan or debt that is
prohibited. Islamic principles simply require that performance of capital should also be
considered while rewarding the capital.
Profit has been recognized as ‘reward’ for (use of) capital and Islam permits gainful
deployment of surplus resources for enhancement of their value. However, along with
the entitlement of profit, the liability of risk of loss rests with the capital itself. No other
factor can be made to bear the burden of the risk of loss. Financial transactions, in order
to be permissible, should be associated with tangible real assets. At macro level, this
feature of Islamic finance can be helpful in creating better discipline in conduct of fiscal
and monetary policies.
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2. INTRODUCTION OF BANKISLAMI:
2.1 BACKGROUND INFORMATION:
Origin Of Bankislami:
The epochal idea of BankIslami was conceptualized by Jahangir Siddiqui & Company
Limited and DCD Group in late 2003. Mr. Hasan A. Bilgrami was appointed as Adviser
to the sponsors on March 16, 2004 to formalize the idea. He presented the concept
paper of BankIslami to sponsors on March 24, 2004. A detailed business plan was then
prepared and a formal application was submitted to the State Bank of Pakistan on May
26, 2004. On September 26, 2005, Dubai Bank joined the Sponsors and became one of
the founding shareholders of BankIslami by investing 18.75% in the total Capital.
Accredition By State Bank Of Pakistan
The State Bank of Pakistan issued a No Objection Certificate in no time on August 19,
2004 and BankIslami Pakistan Limited, the second full-fledge Islamic Commercial Bank
in Pakistan, was incorporated on October 18, 2004 in Pakistan.
BankIslami Pakistan Limited was the first Bank to receive the Islamic Banking license
under the Islamic Banking policy of 2003 on March 31, 2005. The Bank envisioned to
focus primarily on Wealth Management as the core area of business in addition to
Shariah compliant Retail Banking products, Proprietary and Third party products, and
Integrated financial planning services
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Initial Public Offering of BankIslami:
BankIslami Pakistan Limited made a public offering of Rs. 400 Million, at par, from 6th
to 8th March. This was the first primary issue by a Bank in over a decade in Pakistan.
The Initial public offering (IPO) of BankIslami received overwhelming response from the
general public as the applications received were 9 times higher than offered, fetching
nearly Rs. 3.5 Billion, against the demand of Rs. 400 Million.
Competition Situation:
BankIslami is the Joint venture project of 3 groups with 18.75% equity each, namely
Jahangir Siddiqui & Co. Pakistan, DCD Group UK, & Dubai Bank. Irrespective of stiff
competition in the market the Bank has successfully managed to grow over 400%
during last one year and all set to be a 100 Online Branch Network by the year end
2008.
The same was achieved by the existing largest player in the Islamic banking industry
Meezan Bank in 6 years time at December 2007. BankIslami has become a hallmark of
innovation and bringing new products and services in the market and by introducing the
Bio-Metric ATM facility it became the first bank of the region to offer such services and
till date no bank has been able to replicate this service. Bio-Metric identification (based
on finger print) removes the need for PIN based verification and it adds the security
element in ATM transactions.
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24 March 2004 Concept paper of Islamic Bank presented to Sponsors; JS Group and
DCD Group
26 May 2004 Application for the license of an Islamic Bank was submitted to SBP
19 August 2004 BankIslami received the No Objection Certificate from SBP
18 October BankIslami became a legal entity after SECP granted it an

2004 incorporation certificate
31 March 2005 SBP Governor, Dr. Ishrat Hussain issued Islamic Banking license to
BankIslami
26 September Dubai Bank became founding shareholder of BankIslami by investing
2005 18.75% in the total Capital
26 February BankIslami share debuted on the Karachi Stock Exchange
2006
6 march 2006 BankIslami's three day Initial Public Offering (IPO) was initiated and
got oversubscribed by 9 times
17march 2006 State Bank of Pakistan declared BankIslami Pakistan Limited as a
Scheduled Bank
7 April 2006 BankIslami started commercial operations from its 1st branch at
SITE, Karachi
7 April 2006 BankIslami became the First bank in Pakistan & Asia and the Second
Bank in the World to install BIOMETRIC ATM
7 April 2006 BankIslami became the First bank in Pakistan to launch Internet
banking from start of operation
31 August 2006 State Bank's Director of Islamic Banking, Mr. Pervez Said
inaugurated the induction ceremony of the first Trainee Officers batch
of BankIslami
4 September Phone Banking services were launched by BankIslami
2006
22 December BankIslami went nationwide with the opening of its 9th branch on
2006 Jinnah Road, Quetta. This was BankIslami's first branch outside
Karachi
29 December BankIslami opened its 10th Branch in Baqai Medical University,
2006 Karachi. At the end of year 2006 bankislami has 10 branches.
3 March 2007 BankIslami signed ORIX network for its '1 Card'
30 April 2007 BankIslami became the first Bank in Pakistan to sign contract with
Haydrian for 'XM3", a state of the art Anti Money Laundering (AML)
software
3 May 2007 BankIslami launched home financing product "MUSKUN"Page 32
11 May 2007 BankIslami's Islamabad branch opened in Blue Area, Islamabad
15 June 2007 Karachi Stock Exchange Branch of BankIslami was opened
21 June 2007 BankIslami signed agreement for a state of art Shariah compliant
Banking system software "iMAL" with Path solutions
2.2 Milestones
2.3 LOGO OF BANKISLAMI:

When it is a question of faith,
Authencity
Is a key word
Our name and logo set the benchmark
A simple, local and Authentic name that leaves

No confusion about what we do
ONLY ISLAMIC BANKING!
Motif:
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The blue and green motif set the background of logo. Like all Authentic Islamic motifs, it
has 8 corners filled with flowing lines without any source point. These two features are
important part of Islamic art.
Script and calligrapher:
We opted the Arabic script for its versatility, beauty and Authenticity, Khat-e-sulus, a
script which has graced the Islamic monuments from the subcontinent to turkey to arbic
including the two most sacred mosques, was opted for. It stands for timeless traditions
and values that muslims in these regions have shared for centuries-trade and
commerce included. When it came to the calligrapher, we went to one of the best
sources I the world, Ustad Shafiq-uz-Zaman, the only person chosen to do calligraphy
in the Masjid-e-Nabwi after 500 years.
The crescent
The rising crescent in a traditional green encircles the motif and calligraphy. The
crescent has deep association with contemporary and modern Islam. In logo it stands
for Shariah encompassing everything that we do at BankIslami.
Motif Bands
Two motif bands run parallel to each other and frame the symbol. Again, stars in the
band have 8 corners. This band is found in many Islami monuments all around the
world including the holy ka’ba.
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GENERAL PROFILE OF BANK ISLAMI:
BankIslami operates by following vision, mission and values.
VISION
The vision of bank islami is to be recognized as the leading authentic Islamic bank.
.
MISSION
The Mission of BankIslami is to create value for our stakeholders by offering Authentic,
Shariah Compliant and technologically advanced product and services.
We differentiate ourselves through:
Authenticity
Innovation
Understanding our client's needs
Commitment to excellence, and
Fast, efficient and seamless delivery of solution. As a growing institution, the
foundation for our performance lies on our human capital and BankIslami
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remains committed to becoming an employer of choice, attracting, nurturing and
developing talent in a transparent and performance driven culture.
VALUES:
BankIslami is strongly committed towards its core values of:

Product authenticity
Customer focus
Meritocracy
Integrity
Team work
Humility
Innovation
Objectives of Bank Islami:
• The main objective of bank Islami is “Serving in the right way”

• To create value for Stakeholders by offering Authentic, Shariah Compliant and
technologically advanced product and services.
• To continue developing and delivering innovative products and services.
• To achieve sustainable growth, maximum market share, and high profitability in
all areas of banking.
• To maintain absolute world class service excellence, with a dedicated focus on
value and recognition for our customers.
• To build and sustain a high performance culture in accordance with Islamic
values and Shariah principles.
• To promote “Riba free” Banking in Pakistan as well as in foreign countries.
• To become an employer of choice, attracting, nurturing and developing talent in a
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transparent and performance driven culture.
2.4 CORPORATE INFORMATION OF BANKISLAMI:
Organizational Structure of BIPL
Page 37
Corporate information:
Board of directors:
“The people who draw the picture of the organization on a broader canvas of strategy
and planning, the pioneers of prosperity and the world of wisdom that paves the path to
a long term success.”
The Board of Directors of BankIslami comprises of eminent representatives from the

Bank and its Sponsors. These include:
• Chief Justice (R) Mahboob Ahmed (Chairman),
• Mr. Ahmed EIshall,
• Mr. Ahmed Randeree,
• Mr. Ali Raza Siddiqui,
• Mr. Hasan A. Bilgrami,
• Mr. Shabir Ahmed Randeree
• Mr. Mohamed Al Amiri.
Sharia'h Supervisory Board
• Justice (Retd.) Muhammad Taqi Usmani (Chairman)
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• Professor Dr. Fazlur Rahman (Member)
• Mufti Irshad Ahmad Aijaz (Member & Shariah Adviser)
Audit Committee
• Mr. Ahmed Mohammed EI Shall (Chairman)
• Mr. Ali Raza Siddiqui (Member)
• Mr. Shabir Ahmed Randeree (Member)
Executive committee
• Chief Justice (Retd.) Mahboob Ahmed (Chairman)
• Mr. Ahmed Goolam Mahomed Randeree (Member)
• Mr. Mohammed EI Shall (Member)
• Mr. Hasan A. Bilgrami (Member)
Human Resource & Compensation Committee
• Mr. Ali Raza Siddiqui (Chairman)
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• Mr. Ahmed Mohammed EI Shall (Member)
• Mr. Hasan A. Bilgrami (Member)
Company Secretary
• Mr. Syed Shah Sajid Hussain
Auditors
• Ford Rhodes Sidat Hyder & Co
• Chartered Accountants
Legal advisor
• Haidermota and co
• Barrister at law
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Management in alphabetical order:
“The brilliants whose passion is dedicated to discover newer ways to make the
organizations goal reality.”
• Mr. Adnan Hamid Ali (Head, Administration & General Services)
• Mr. Arsalan Vohra (Head, Risk Management)
• Mr. Asad Alim (Head, Information Systems)
• Mr. Khawaja Ehrar ul Hassan (Head, Compliance)
• Mr. Faisal Shaikh (Head, Product Development)
• Mr. Farooq Anwar (Head, Operations)
• Mr. Hasan A. Bilgrami (Chief Executive Officer)
• Mr. Muhammad Furqan (Head, Credit Administration)
• Mr. Muhammad Imran (Head, Consumer & Retail Banking)
• Mr. Muhammad Shoaib Khan (Head, Treasury & Financial Institutions)
• Mr. Rehan Shuja Zaidi (Head, Internal Audit)
Page 41
• Mr. Shamshad Ahmed (Head, Trade Finance)
• Ms. Sheba Matin Khan (Head, Human Resources
• Mr. Syed Akhtar Ausaf (Head, Credit)
• Mr. Syed Mujtaba H. Kazmi (Head, Corporate Finance)
• Mr. Syed Shah Sajid Hussain (Head, Finance)
2.4 SPONSORS
Page 42
BankIslami is a joint venture among three financially sound and progressive shareholders, namely,
DCD Group, Dubai Bank and Jahangir Siddiqui & Co. Ltd. Please click on the following for details
of our Sponsors:
Page 43
DCD Group
The history of the modern DCD Group can be traced back to Jersey ( The Channel Islands ) in
1975 with the formation of DCD Holdings Limited. After three decades of trading, today the
Group has its Family Investment office based out of the DIFC (Dubai International Finance
Centre) with its operations extending to London, New York and Dubai.
The DCD Group's core business activities are concentrated in the Real Estate and Banking
sectors. The Real Estate division of the DCD Group concentrates on enhancing and delivering
long-term gains for the Group and its Partners internationally. The Group has built its track-
record primarily in the UK and USA, then spread to the Middle East and a select number of Far
East and African destinations. Over the past three decades, the Group's real estate
investments have produced a consistent, attractive IRR
The DCD Group's interests in the Banking sector comprise of various niche holdings
internationally, including a stake in Dallah Albaraka Bank Limited in South Africa which was
formed in 1989.
More recently, the Group played a pioneering role with QIIB (Qatar International Islamic Bank)
in the formation of the Islamic Bank of Britain PLC (IBB) and retains its shareholding in the
Bank. DCD also remains a founding shareholder in the European Islamic Investment Bank
PLC (EIIB), which raised approximately 200 million pound, pre and post listing on the LSE.
In 2007, the Group was founding investors in The Islamic Bank of Asia in Singapore, with DBS
Development Bank of Singapore as the principle promoter.
Dubai Bank PJSC
Page 44
Page 45
E-statement:
E-statement is a facility that not only helps customers in

viewing their statements whenever and wherever required but also brings an end to
filing the Statements and keeping a paper stack. It is a convenience that offers the
customers ease of use along with a worldwide access to their banking transactions.
How to Register?
Call 111 ISLAMI (111-475-264)
Speak to a Phone Banking Officer
Request for e-statement Activation
Specify the Account
Specify the Statement Frequency
Available Statement Frequencies
• Daily
• Weekly
• Monthly
• Semi Annually
Customer can enjoy daily, weekly, monthly or yearly statement of his account
whenever and wherever required.
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Safe Deposit Lockers:
Bank Islami Safe Deposit Locker facility enables

customers to store their valuables in strong heat resistant steel lockers with 24 hour
security. Be it jewellery, passports, share certificates or title deeds, customers can
rest assured that their valuables are not prone to loss, fire or theft. They an also
nominate/authorize their dear and loved ones to operate the Locker. Now they can
live a carefree & stress free life while BIPL take care of their valuables while
retaining their privacy..
Following are the key benefits that they will get out of using safe deposit locker
facility:
• Absolute privacy to operate their locker in a comfortable, centrally air-

conditioned environment.
• Protection against weather conditions & power failures with smoke-sensor's,
backed by fire fighting equipment and 24 hour manned security
• A Locker custodian to offer friendly and personalized assistance.
• Maximum of four (4) deposit operators per Locker.
• Safety of their valuables from loss, fire and theft.
• Unlimited free visits to their Locker.
• Availability of different Locker sizes (Small, Medium and Large) to suit and
accommodate their needs.
• Takaful coverage of up to Rs. 25,000 for medium Lockers and Rs. 100,000
for large Lockers
• Locker Rent payable annually and in advance (as per schedule of charges).
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Key Deposit payable in advance as a condition for Locker facility.
3.3 CONSUMER BANKING:
• Muskun home financing
• Islami auto ijarah new vehicle
• Islami auto ijarah used/ imported
MUSKUN HOME FINANCING:

BRINGS TO YOU A HOME OF YOUR OWN……….
BankIslami MUSKUN home financing is the simplest and most convenient shariah
Page 48
Compliant way to build, buy and renovate a home of your own or transfer interest based
loan from others bank to bankIslami (through BTF). Our product is based on
Diminishing Musharakah and approved by the renowned Shariah Board.
Key features:
• Quick processing
• Financing limit upto 80% of the property value
• Financing upto rs. 50 million
• Tenure upto 20 years
• Partial pre-payments
• Flexible and affordable installment with a regularly reducing monthly rental
• Property financing on all locations
• Special financing for Non-Resident Pakistanis
BankIslami provide you financing for following facilities:
Home purchase
Just point your finger at the Bungalow or Apartment of your choice and we'll help you
buy it.
Financing
2 to 20 years
Tenure
Financing
Rs. 200K – 10M
Range
Bank Maximum up to 80% for salaried / selected SEPs *
Investment Maximum up to 70% for Businesspersons/NRPs
Ratio (* Doctors, Engineers, Architectures, Chartered Accountants)
Prepayment No Penalty apply after one year.
Option In case :Customer applies for purchase of early units or pre-payment
available within 12 months after disbursement, additional Musharakah Units will
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be revalued at 5% higher than face value.
Home construction:
bankIsami helps you to build your house.
Construction
Maximum 2 Years
Tenure
Financing Minimum 2 Years (excluding construction period)
Tenure Maximum 20 Years (including construction period)
Financing
Rs. 200K – 10M
Range
Salaried / Selected SEPs*:
Bank
• Up to 80% for financing upto Rs. 10M.
Investment
• Up to 70% for financing > Rs. 10M.
Ratio
Businessmen/NRPs: Up to 70% for all financing amounts.
No Penalty apply after one year.
Prepayment
In case Customer applies for purchase of early units or pre-payment
Option
within 12 months after disbursement, additional Musharakah Units will
available
Home renovation:
bankIslami also helps to renovate your house.
Construction
Maximum 6 months
Tenure
Financing
2-7 Years
Tenure
Financing Rs. 150K – 10M
Page 50
Range
Bank Maximum 50% for Salaried / Selected SEPs*
Investment Maximum 50% for Businessmen/NRPs
Ratio (* Doctors, Engineers, Architectures, Chartered Accountants)
Prepayment
Option
available
Home replacement:
Don't lay the foundation of your Dream home on interest. If you already have a
Conventional Mortgage loan and want to switch to Shariah compliant means of
Financing, we'll help you transfer it.
Financing
2-20 Years
Tenure
Financing
Rs. 200K - 10M
Range
Salaried / Selected SEPs*:
Bank Up to 80% for all financing
Investment Businessmen/NRPs:
Ratio Up to 70% for all financing amounts.
(* Doctors, Engineers, Architectures, Chartered Accountants)
Prepayment
Option
available
be revalued at 5% higher than face value
Page 51
Eligibilty:
Citizenship Pakistani
Cities Karachi , Lahore and Islamabad/Rawalpindi
Salaried/Businessmen/Selected Professionals:
Primary Applicant: 25-65 Years
Co- Applicant: 21-70 Years
Age Limit
NRPs:
Primary Applicant: 25-60 Years.
Co- Applicant: 21-70 Years.
Salaried:
Minimum 6 months at current employment and 2 years continuous employment
Employment
experience in the same industry/field.
Tenor
Businessmen:
3 years of business / practice.
Salaried: Rs. 35,000/-

Minimum Income Business man: Rs. 50,000/-
NRPs: Rs. 100,000/-
1. An NRP needs to have a Co-applicant residing in Pakistan as an Authorized

Additional
Person on behalf of the NRP.
Criteria for NRPs
2. Only Salaried NRPs can avail MUSKUN Home Financing.
Documents required:
• Copy of CNIC (Applicant and Co-applicant)
• passport size photographs (Applicant and Co-applicant)
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• Completely filled Application form with Applicant's Profile Report
• Copies of Last 6 months paid utility bills
Property documents:
• Copy of chain of all title documents
• Approved Building plan
• Public notice
For salaried person:
• Employment certificate issued by employer
• Last three Salary Slips
• Bank Statement of last 12 months
• Detail of other financing along with its repayment
For businessman:
• Income tax return for last three years , Proprietorship Letter/Partnership ded/
Memorandum and Articles of Association
• Company Bank Statment of last 12 months
• Detail of other financing along with its repayment
ISLAMI AUTO IJARAH:
BankIslami's Auto Ijarah facility is based on the concept of Ijarah. It is a Shariah compliant alternative
to Conventional leasing where Bank acts as a Lessor and you act as a Lessee. The Bank requires
you to pay a monthly rent for the use of the Vehicle. In this while, the ownership of the vehicle
remains with the Bank, only the rights of use is transferred to you. At the end of the Ijarah
Agreement, you will be given a choice whether to return the vehicle to the Bank and receive back the
security deposit paid by you at the beginning* or to purchase it at a price as low as the security
deposit.
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Ijarah facility for New Vehicles
Tenure of Ijarah Min- 3 Years, Max-5 years
Minimum Cost of
Rs. 250,000
Vehicle
Security Deposit Min -30%, Max-50%
Processing Charges Rs. 4,500/- (Rs. 1,000 Pre Processing is part of the Rs. 4,500/- Amount)
All Vehicles costing above Rs. 600,000 are required to be installed with
Tracker Installation
tracker
Takaful coverage on all vehicles is compulsory and is provided by Takaful

Takaful
Pakistan
Eligibility:
Citizenship Pakistani
Cities Karachi, Lahore and Islamabad/Rawalpindi
Income Minimum Rs. 20,000 (Net Disposable)
For Salaried:
Minimum 23 Year (at the time of Maturity)
Maximum 60 Years (at the time of Maturity)
Age Limit
For Self employed:
Minimum 23 Years (at the time of Maturity)
Maximum 65 Years (at the time of Maturity)
Documents required:
• Salaried individual
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Last six months Bank Statement
Copy of CNIC
2 Photographs
Copy of N.T.N Certificate( if available)
Paid Utility/mobile/card bills-within last 2 months
Salary Slip
Employment letter ( should be from HR and should disclose the tenure of
employment, designation, salary breakup)
For businessman:
Last one year Bank Statement
Copy of CNIC
2 Photographs
Copy of N.T.N Certificate or Proprietorship letter
Visiting Card
1 month current and paid Utility /mobile/card bill
3 years Business Proof
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3.4 CORPORATE BANKING:
All of your financial needs are within the reach of our highly qualified professionals who
are fully capable and committed to understand your business and provide timely and
effective financial services on an on going basis.
We offer the following products and services to help you achieve your business
objectives:
Account Services
Trade Services
Working Capital Finance
Project Finance
Musharakah Finance
Mudarabah Finance
Ijarah
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4. DEPARTMENTS:
• CUSTOMER SERVICE DEPARTMENT
• OPERATION DEPARTMENT
• CASH DEPARTMENT
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4.1 CUSTOMER SERVICE DEPARTMENT
Functions performed in customer services
• General client dealing
• Account opening
• Account closing
General client dealing
When the customer enters into the bankislami premises, he went to the customer
services officer who provides him the guidance and basic information which he wants.
He then sends the client to his respective department about which he wants to get the
information.
Account opening:
Borrowing funds from different sources has become an essential feature of today’s
business enterprises. But in the case of bank borrowing funds from outside parties is
more vital because the borrowed capital of a bank is much greater their own capital.
Banks borrowing is mostly in the form of deposits. These deposits are invested into
different investment pools. Such deposit creation is done through opening an account
in the bank.
Account opening and closing is the function of customer services department. The
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bank’s customers include individuals (single or joint); firms (partnership/proprietorship),
Autonomous corporations, Limited companies/Charitable Institutions, associations,
Educational Institutions or local bodies
Requirements for account opening
The general procedure for account opening is same but the document required to open
the account is different according to two type of account. The bank officer must assure
that the customer has the following characteristics:
• The customer must have the the age of maturity

• The customer must be of sound mind
• The customer must not be insolvent and bankrupt.
Account opening form
It is a form that contains the account number, date, title of the account, applicant name
and address, special instructions (if any) information about zakat deduction etc.Then
this filled form is submitted to bank, the bank admits the signatures of the applicant and
verifies the signature.
Things attached with account opening form:
Specimen signature card
This card contains the account number, title of the account, and the specimen signature
of the account holder. Two copies of this card are required one is kept with and the
other sent to the head office for signature scanning purpose.
National Identity card
The bank officer checks the number of id card is correctly recorded in the AOF and a
copy of ID card is kept in record by the bank.
Third Party mandate
Page 59
If the applicant wants to authorize the third party to sign and deal transactions with the
bank then this form is filled by the bank.
Confidential customer profile form (KYC Form)
This form is filled for checking the credibility of the applicant by the bank officer
Undertaking for difference in signature on CNIC and AOF
In case of difference in signature on NIC and AOF an undertaking is taken from the
applicant so that the bank is not liable for any change in signature.
Vernacular form
In case of shaky sign this form is filled by the applicant.
Biometric thumb expression
In all types of accounts thumb expression is taken from the applicant
Verisys NADRA
In all type of account NADRA Verisys is taken for verification of NIC number, place of
birth, mother name, and for checking the validity of NIC.
Terms and conditions
Applicant’s signs are taken on term and conditions before opening an account.
Zakat Declaration form
If the customers do not want the deduction of the zakat charges from his account then
he will provide the bank officer zakat declaration form stamped with registrar notary
public.
Source of Income
The following Source of income is taken from applicant.
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Types of relationship account:
• Individual account
• Joint account
• Sole proprietorship account
• Partnership/Club/Society/Association/NGO/Trust account
• Limited company accounts
• Minor account
Opening of individual account:
“When a single man or woman opens an account in his or her own name and has the
right to operate, it is called individual A/C.”
Documents required:
• Filled Account Opening Form
• Computerized National Identity Card (CNIC)
• Passport (for Non-residents only)
• Employment proof (Pay slip, Employment letter etc)
Minor account:
• The name of guardian is written in Title of Account.

• The account can be in any one of the schemes.
• Signatures of the guardian always used to perform any transaction.
Important Documents required

• Bay form and copy of passport minor
• National Identity card of Guardian
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• Signature requirement of guardian
• Title as follows as “ABC(M) & DEF(G)
• Birth certificate of minor
Joint account
“When two or more persons neither partners nor, trustees, open an account in their
name is joint account."
Documents required:
• National Identity card of all Applicants.
• Signature of all Applicants.
• Zakat Affidavit of all Applicants (zakat Examption).
• Operation of account clearly mentioned.
The options available to operate the account are:
• Jointly
• Either or Survivor
• Other(s)(Please specify)
Club/Society/Association/NGO/trust (requirements)
• Certified copy of resolution
• Certified copy of rules
• Copies of National Identity cards of all directors/trustees
• Completed account opening form
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• Specimen signature card
• Certified copy of trust deed
CORPORATE ACCOUNTS
1. Sole proprietorship account
When the owner of the firm operating singly, open an account in his firm name.
Documents required
• Filled Account Opening Form

• Computerized National Identity Card (CNIC)
• Passport (for Non-residents only)
• NTN Certificate
• Declaration of Sole Proprietor on company letterhead
• Business registration Certificate
2. Partnership account
• Partnership Deed, certified copy.
• Copies of CNIC of all partners.
• Certificate of registration
• Copy of NTN certificate
• Signatures of all partner
• Certified copy of rules
• Certified copy of resolution
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Note:
• Partnership account have no ATM.
• Current account is open for partnership
3. Limited companies account:
• List of Directors of company.

• NIC of all Directors.
• Copy of certificate of Incorporation.
• Memorandum of Association.
• Article of Association.
• Copy of Board Resolution.
• Copy of NTN certificate and Latest Copy of Form-29
• Stamp of Company, which is to be affixed on the account opening form.
• Certificate of Commencement of Business (PLC only)
Photo account
These accounts can be opened individually or jointly. For men, the right hand thumb
impression and for women, the left hand thumb impression is taken on account opening
form. The customer is given advice to come to bank himself in order to withdraw any
cash or deposit the cheques.
These accounts are for:
• Person having shaky signs or urdu sign,
• blind person
• disable person
Documents required
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• copy of NIC of Account Holder.
• Two-three passport size photographs
NOTE:
Form should be in urdu.

ATM is issued but it is biometric.
No zakat deduction.
Online account.
For cash debit there presence is necessary, cash credit is made by any person.
Procedure for account opening:
first of all, after inquiring from the customer what type of account he/she wants to open,
the account opening form is got filled from the customer and signed it. Along with the
account opening form, the customer is also signed two Specimen Signatures Cards.
After fulfilling all the formalities of account opening, the computer generated account
number is given to the customer that is of special series depending on the type of
account.
REQUISITION SLIP
A requisition slip is given to the customer to sign it so that the customer can get
chequebook. Chequebook is issued after one day of receiving the requisition slip.
LETTER OF THANKS
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After opening the account “A Letter Of Thanks” is send to the customer in order to thank
the customer for opening an account in the Bank. This letter tells all the information
regarding his/her accounts, which are kept very confidential.
ACCOUNT OPENING REGISTER

After an account is opened, an entry is made in the account opening register, which has
the following columns:
• Date
• Account Number
• Name & Address
• Telephone Number
• Initial Deposit
Customer Services/Relation Officer enters the new account opened in computer and the
Specimen signature Cards are also scanned so that whenever a cheque of the
respective account comes for encashment, the signatures can be verified.
4.2 OPERATIONS DEPARTMENT

Functions performed by operations department.
1. Clearing
2. Remittance
1. CLEARING
Clearing is the way through which Bank Islami clears cheque of other banks and clear
the cheques of its own bank from other banks.
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Every bank acts in two ways:
• Paying bank
• Collecting bank
A large part of this work is carried out through the bankers clearing house wherever it is
established.
Clearing House
Clearing house is the place where representatives of all the banks of the city get
together for the purpose of settlement of payments and receipts of cheque drawn on
each other.
Normally clearing is carried out in state bank of Pakistan but in the areas where there is
no branch of SBP national bank work as subsidiary of SBP.
Types of Clearing
• Inward clearing
It means those instrument that have been received by a bank of its own
branch for clearing from other banks.
• Outward clearing
It is an instrument that is sent by the originating bank to the other banks for
the collection of funds.
Instruments used in clearing
• Demand Draft/Pay order

• Call deposit receipt (Same city)
• Cheques
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• Bills for collection (All types of cheques of SBP and Treasury cheque)
Role of NIFT in clearing:
National institutional facilitation technologies came into existence in may 2006.NIFT
play an important role in clearing. Its main responsibility is to pick and drop instruments
from one bank and realize it from other banks and report to state bank of Pakistan. NIFT
deduct charges of its duty.
Procedure of Clearing
In inward clearing if customer want to transfer his funds from Islami bank to Al-falah
bank then the customer will make a cheque from Islami bank and cross this cheque
and deposit this cheque in al-Falah bank.The Al-falah bank will make a deposit slip
against the cheque deposited and paste its crossing stamp upon the cheque.Deposit
slip is handed over to customer as a proof then the bank Al-falah will handover that
instrument to NIF.Now NIFT role come into existance.The Bank Al-falah will fulfill
three requirements:
• Bundle cover
• Summary/delivery receipt
• Manual statement of list of instruments
NIFT member will received these above things from bank Al-falah and will go to SBP for
change exchange of instruments where members of NIFT for each bank sit together
and each member receive the instruments of his concerned bank and in the next day
before 9.00 am NIFT will handover to the cheque of bank Islami to its respective branch.
At 2.00pm BIPL will passed the entry in the system and checkout the account of that
person and will clear it and will report to NIFT of nill or if there is any return then report
for the same to the NIFT and then NIFT will go to SBP and then after some process the
returned cheque to respective bank.
2. REMITTANCE
Remittance means transfer of funds from one place to another this department perform
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the function of transfer of money. The need of remittances is commonly felt in today’s
business. The main function of remittance department in a bank is the transfer of funds.
Mr.M.Asad Mehmood Ali Zai in BIPL is the officer for Remittances Department.
Modes of remittance
• Pay order
• Demand draft
• Internal transfer
• Telegraphic transfer
Types of remittance
• Local remittance
In local remittance funds are transferred within the country from city to city or
within the same city.
• Foreign remittance
In foreign remittance funds are transferred outside the country.
The procedure for dealing with all these under local as well as foreign currency in BIPL
is as under.
Pay order/Demand draft
A pay order is a written order issued by a bank, drawn upon & payable by itself, to pay a
specified sum of money to or to the order of a specified person. According to bank
Islami pay order and demand draft concept is same. It is an online transfer of funds.
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Procedure for payment order/Demand draft
Application form is given to the applicant to fill. Account Application form is then given to
the Remittances Incharge for issuance of instrument. He enters all the particulars of the
application form in the system and computer gives an Auto Control Number to the
instrument. Printout is taken on the block of payment Order. Two authorized officers of
the branch then sign it. Instrument is then protect graphed, and given to the customer.
After filling the application form bank will issue the pay order/demand draft to the
applicant. Funds will transfer to the applicant bank’s Pay order general account and
then the customer handover that pay order or demand draft to the third party in whose
name he made the pay order/ demand draft. Then that third party will present that pay
order/demand draft in his correspondent’s branch form where this will present to the
nearest BIPL branch from where the funds will transfer to the beneficiary account.
BIPL issue demand draft only for that city in which there is no branch of BIPL Then BIPL
will link in that city to other banks for example HBL Ahmedpur branch.BIPL will issue
demand draft to the name of HBL and then the funds will transfer through HBL to
beneficiary account.
Internal Transfer
This type of transfer is simple in which funds are transfer from one account to second
account may be of same branch or other branch of same bank. There are two ways for
this transfer:
• With Cheque
If money transfer by cheques and transfer in the account of concerned person
then he will bring the cheque from that branch
• Without cheque
In which customer give a request for funds transferring from his account to
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the concerned person.
Telegraphic transfer:
The transfer of funds by means of fax. It is the fast way to transfer of funds from one
branch to another of same bank. The amount will credit to the beneficiary account with
in 24 hours.
Procedure
After filling the application form the concerning officer shall fill the telegraphic transfer
form, then it is send to the correspondent bank which on receiving it immediately makes
the payment to the customer and afterwards the voucher are sent to that bank by
ordinary mail.
4.3 CASH DEPARTMENT
Cash department is the major point of contact among the customer and the bank. All
cash dealings are done through the cash department and the officer in this department
is called “teller”. His main responsibility is to deal with the cash payment and receipts.
There is a teller dealing with cash payment and receipts separately.
Cash Department performs two main functions
1. Cash deposit
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Cash receiving officer receives cash along with pay-in slip from the customer. He
checks if the deposit slip is properly filled up containing title of account, account
number, date and amount in word and figures. He also verifies signature. Cash is
received by the cash receiving officer, twice counted and matched with the deposit slip.
The cash details are written on the deposit slip and are also entered in account of the
customer. Cash received stamp is affixed on the face of both deposit slips along with
the signature of the cash receiving officer and the customer’s copy is given to the
customer as a receipt.
Deposit slip given to the Incharge in cash department. Again proper scrutiny is made by
the Incharge cash department on cash receipt. Incharge cash department signs the
deposit slip; Deposit slip is checked and verified in the concerned account in the
system.
2. Payment of cheques
First the customer presents the cheque to branch and the particulars of cheque are
properly filled in. Signature of the holder is taken on the back of the cheque. Cheque
handed over to the officer cash department for scrutiny where officer checks the date,
amount in words and amount in figures, payee's name crossing if any, account number,
cheque serial number, any material alterations, endorsements and signature of the
customer. It is posted in the I-mall system and Account is debited and then the officer
cancels cheque and posting stamp and number is affixed on it. Cheque is handed over
to the cash payment officer for payment. One more signature on the back of the cheque
is taken from the holder to match with the first one, and then cash is paid to the payee.
Cash detail in denominations is written on the back of the cheque. Cash paid stamp is
affixed on the face of the cheque. Entry is passed in the I-mall system.
If the payment is of Rs. 20000 the cashier can make it on its own. If the amount is
greater than Rs. 20000 the cashier and cash deposit Incharge will verify the check and
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will sign. it. Then the payment will be made. The process for payment of cheques for
local and foreign currency is same.
In case of photo account, the account holder whose photos were given at the time of
account opening must be there at the time of cash deposit and payment of cash no one
else can withdraw or deposit the cheques.
Other functions
• Cash change
• Fresh cash
• coins
Instruments use in cash department
• Notes detector machine

• Notes binding Machine
• Notes counting machine
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Requirements by SBP for cash Counter of BIPL
According to the State bank of Pakistan the following instructions are required to be
pasted on the cash counter in front of the customers:
• Receipt
• Clearing
• Payment
• Above 50000/- cheque provide CNIC copy
• Check your money before leaving the counter
• Senior citizen counter
• Utility bills
• Fresh currency Rs.5,Rs.10,Rs.20 are available at any time
• All denomination notes are available here
• Rs.5000 can be changed here
• Coins Available here
• Any type of donation will be received from receipt counter
• Defective notes can be changed here.
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5. Swot analysis:
“You have brilliant ideas but if you can not get them across, your ideas will not get you
anywhere.”
Lee lacocca
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STRENGTHS
• Network:
Bank Islami was established in 2006 but it has created history by setting 102
branches in 49 cities across Pakistan in just two years of its operations. This is the
fastest ever branch network growth by any bank in Pakistan’s banking history. So
bank Islami has high growth potential.
• Pure Islamic banking:
Bank Islami limited is conducting its business in a pure Islamic way that is
according to Shariah and Islamic rules. So it is doing pure Islamic banking that is
the greatest strength of bank as compare to conventional banks.
• Members of shariah board:
The members of the Shariah Supervisory Board of Bankislami are Internationally-
renowned scholars, serving on the boards of many Islamic banks operating in
different countries.
• Value added services:
BankIslami limited has differentiated itself from other banks in offering services
which is a great source of attraction for customers as free online, free internet
banking, free eStatements, free Pay order issuance facility, free ATM and 24/7
call center, free cheque book issuance etc.
• Centralized check and balance system:
There is centralized check and balance system in Bank Islami. Operations of the
branches are monitored by the head office (Situated in Karachi) on daily basis all
over the Pakistan. So Bank Islami is providing reliable services to customers.
• Online banking:
It has branches in all the major cities of Pakistan with the facility of online
banking, it is very easy for its customers to transact all over the country.
• Customer relation:
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The employees at the bank provide impeccable customer service to their
customers. For them “the customer is the king’. Customers are treated with great
respect and honored to the utmost degree.
• Products and services:
The products and services designed by the bank are specifically modified to the
individual needs of its customers.
• Friendly and cooperative working environment:
The working environment of the bank is very friendly and cooperative. There is no
bossiness in the higher management. The upper management consults its staff in
making decisions and provides them independence in their job areas. For the
objective is performance and not conformance with the boss.
• Technological innovations:
Bank enjoys a strategic competitive advantage over all domestic players by virtue of
its leadership in technological innovations like centralized account opening system,
biometric ATM etc.
• Staff welfare:
staff welfare has always been a priority. New initiatives like hospitalization plan, car
buy-back facility and home loan insurance have added new dimensions to the staff-
care policy and motivated those to out- perform competitors.
• Human resource department:
Bank Islami Pakistan has good human resource department that has responded well
to the challenge of recruitment. Good training sessions are held by the bank through
which staff turnover remained one of the lowest in the industry.
• Instruments payable at any branch:
Bank Islami, s instruments are Payable at any BIPL Branch all over the Pakistan
which is its greatest strength as compare to other banks.
Biometric ATM:
BankIslami became the First bank in Pakistan & Asia and the Second Bank in the
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World to install BIOMETRIC ATM
WEAKNESSES:
• Smaller number of branches:
Bank has smaller number of branches and they are at greater distance potential
customers may prefer to go to the other feasible options.
• One branch in Bahawalpur city:
There is one branch in Bahawalpur city that’s why there is great work load on
staff.
• Departments are not fully working:
As Bahawalpur branch was established in 2008 and it mainly focusing on
retail banking and other departments like car ijarah, home financing etc are
not working in bahawalpur.
• Lack of awareness:
People are not fully aware about Islamic banking and have no reason to
switch to it so under such conditions the promotional activities of the BIPL are
not enough. The bank should create awareness in the people that how they are
different from the conventional banking by its marketing and advertising
activities.
• Centralization:
Centralized decision making causes lots of failure in decision making.
• Lack of female staff:
Lack of female staff causes problems for female customers.
• Overseas branch network:
There is no overseas branch network of BIPL so it will unable to compete with
those banks that have overseas branch network and have huge number of
investors.
• Lack of space and furniture facility
Lack of space and furniture facility in BIPL Bahawalpur branch creates
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inconvenience for staff, customers and internees as well.
• advertisements:
Bankislami has only paper advertisement it has no t.v advertisement and not
advertising its products through billboards etc.
• Job advancement:
Job advancement procedure is not for lower staff and junior executives.
Lower staff should be trained about the operations of the bank and junior
executives should given promotions by defining the creiteria like performance.
• Lack of employees in some departments:
Although BIPL is good employer of talented professionals but it have seen
lack of employees in some departments that result in inefficiency of that
deparment.
OPPORTUNITIES
• BIPL is growing at a rapid pace because of less number of competitors.
• Islamic banking is working at its peak in some Asian countries and many
other Islamic countries so there is a strong potential of Islamic banking in
Pakistan this is another opportunity for BIPL to make progress quickly.
• BIPL also provide opportunity to those professionals who do not prefer to
work with banks who deal in “Riba”.
• Demand for Islamic products and services growing rapidly.
• Coming up with products for SME to target the medium level customers.
• Illiterate account holders now enjoy the facility of atm by biometric atm device
and biometric ATM is also safe.
• BIPL is introducing innovative products.
• Doing business with companies having Islamic mindset.
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THREATS
• New Islamic banks are entering in market so BIPL have to face stiff competition.
• Banks like alfalah, mcb, and standard chartered setting up their Islamic section
so it is a threat for BIPL because they have good name in market.
• Uncertain economic conditions and changing government attitude towards
Islamic banking is also threat for bank.
• Meezan bank is the largest competitor of BIPL and providing almost same
services as BIPL is providing. It also has a strong network so it can reduce the
market share of BIPL.
• People are not fully aware about Islamic banking so they thought that Islamic
banks are deceiving under the name of islam.
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6. FINANCIAL ANALYSIS
1. Break Up Value:
2007 2008 2009

Years 2006
(Rs.) 10.01 9.89 9.83 8.98
10.2
10
9.8
9.6
9.4
9.2 (Rs.)
9
8.8
8.6
8.4
2006 2007 2008 2009
• Interpretation:
The market value of all the individual parts of a firm if the firm were to be broken up and the
individual parts operated independently.
The bank undergoes a continuous downfall in a break up value. In 2008 and 2009 the bank is
operating very inefficiently because its break up value exceeds the market value of a share. In
2009, the break up value is Rs. 8.98.
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2. Financing To Deposit Ratio ADR:
2007 2008 2009

Years 2006
(%) 53.94 39.89 52.31 47.14
60
50
40
30
(%)
20
10
0
2006 2007 2008 2009
Interpretation:
Banks allocates their funds into financing theirs client’s projects and investing
into money market and capital market securities.
The banks’ financing to deposit ratio is good in 2006 and 2008. But there is a
slight decline in 2007 and 2009; this means that the bank is less effective in
performing intermediary function in these years.
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3. Earning Per Share:
Net Income
Weighted Average Number of shares
2007 2008 2009

Years 2006
(Rs.) -0.04 -0.13 -0.12 -0.91
-0.2
-0.4
(Rs.)
-0.6
-0.8
-1
2006 2007 2008 2009
• Interpretation:
Earnings per share (EPS) are earnings from initial investment. The most common method for
calculating earnings per share is dividing profit by the weighted average of the common stock.
In all respective years the company has reported a negative earning per share. This is because of
a huge operating expenses or an increase in a number of common shares with a low profit
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percentage. The figures show a persistent decline in this ratio. The earning per share is Rs. -0.91
in 2009.
4. Price/Earning Ratio:
Market Price per Share
Earning Per Share
2007 2008 2009

Years 2006
(Times) -263.75 -124.62 -60.42 -6.47
-50
-100
-150
(Times)
-200
-250
-300
2006 2007 2008 2009
Interpretation:
The price/earning ratio expresses the relationship between the market price of a share of a
common stock and stock’s current earnings per share. The investors view this ratio as a gauge of
future earning power of the firm.The higher the P/E ratio the more the market is willing to pay
for the company’s earnings. But the bank price/earning ratio is low and it shows a vote of no
confidence by the market. The banks’ price /earning ratio is improving each year as it is -263.75
times in 2006 and it is -6.47 in 2009.
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5. Earning Yield Ratio:
Earning Per Share
Market Price per Share
2007 2008 2009

Years 2006
(Times) -3.79 -8.02 -0.017 -0.15
0
-1
-2
-3
-4
-5 (Times)
-6
-7
-8
-9
2006 2007 2008 2009
Interpretation:
This ratio expresses the relationship between the earnings per common share and the market
price per common share. The earnings yield ratio is abbreviated as E/P, and is usually expressed
as a percentage.The earning yield ratio is high in 2007 and it suggests that a stock is
undervalued. This ratio is low in 2008 as compared to other years which may indicate an
overvalued stock. The ratio is -0.15 in 2009.
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6. Capital Adequacy Ratio:
Total Equity
Total Assets
2007 2008 2009

Years 2006
(%) 61.83 37.92 39.83 20.39
70
60
50
40
30 (%)
20
10
0
2006 2007 2008 2009
Interpretation:
Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR), is a
ratio of a bank's capital to its risk. It determines the capacity of the bank in terms of meeting the
time liabilities and other risks such as credit risk, operational risk, etc.
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The ratio signifies the contribution of equity in total assets. The ratio is low in 2009 as compared
to other years i.e.: 20.39%. The BIPL has high ratio in 2006 i.e.: 61.83%.
7. Return on Investment:
Net Income
LTD + Equity
2007 2008 2009

Years 2006
(%) -0.21 -0.26 -0.28 -2.7
-0.5
-1
-1.5
(%)
-2
-2.5
-3
2006 2007 2008 2009
Interpretation:
Return on investment (ROI) measures how effectively a business uses its capital to generate
profit. This ratio measures the income earned on the invested capital.
Since return on investment is a type of return on capital, this ratio measures the ability of the
firm to reward those who provide long term funds and to attract providers of the future funds.
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The figures of BIPL show a continuous decrease in ROI, which indicates that a firm is not
utilizes its asset base well. This ratio is -2.7 in 2009.
8. Return on Equity:
Net Income
Average Equity
2007 2008 2009

Years 2006
(%) -0.42 -0.096 -0.012 -0.096
0
-0.05
-0.1
-0.15
-0.2
-0.25 (%)
-0.3
-0.35
-0.4
-0.45
2006 2007 2008 2009
Interpretation:
Return on equity measures a corporation's profitability by revealing how much profit a company
generates with the money shareholders have invested.
This ratio measures a firm's efficiency at generating profits from every unit of shareholders'
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equity. The above figures shows a negative return on equity. The return on equity is better in
2008 as compared to other years i.e: -0.012%. This ratio is same in 2007 and 2009 i.e.: -0.096%.
9. Due To Banks To Total Deposits:
Due to Banks
Total Deposits
2007 2008 2009

Years 2006
(Times) 2.81 0.70 1.97 .56
2.5
1.5
Times
1
0.5
0
2006 2007 2008 2009
Interpretation:
This ratio signifies the financial mix of bank. In ideal situations, there should be decreasing trend
or consistency in this ratio.
In case of BIPL, although there is a tremendous increase in deposits but borrowing is also
increasing considerably. The ratio has decreased in the year 2007 and 2009.
Also, the increase in bank borrowing might be due to the expansion in branch network, where
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more funds are required in initial years. A minor decrease shows good management. Again this
ratio is also better in comparison with other banks.
10. Return on Deposits:
Net Income after Taxes
Total Deposits
2007 2008 2009

Years 2006
(%) -0.47 -0.37 -0.42 -1.71
0
-0.2
-0.4
-0.6
-0.8
-1 (%)
-1.2
-1.4
-1.6
-1.8
2006 2007 2008 2009
Interpretation:
This ratio represents to what extent deposits contribute towards income generation
The bank undergoes a decreasing trend in this ratio. This is because of the bank’s expansion
over the country or a lot of expenses as compared to total income. The ratio shows a great
decline in 2009 as compared to other years. It is -1.71 in 2009 and -0.42 in 2008.
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11. Advances to Deposit Ratio:
Advances
Total Deposits
2007 2008 2009

Years 2006
(%) 53.94 39.89 52.68 47.46
60
50
40
30
(%)
20
10
0
2006 2007 2008 2009
Interpretation:
Thos ratio expresses a relationship between the total loans sanctioned by the bank in relation to
total amount of money deposited with the bank.
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In 2009, this ratio is 47.46% but this is low as compared to 2008 and 2006. In 2008, this ratio is
52.68%. The bank is good in this ratio.
12. Advances to Deposits + Borrowing Ratio:
Advances
Deposits + Bank Borrowings
2007 2008 2009

Years 2006
(%) 52.5 39.6 51.3 47.19
60
50
40
30
(%)
20
10
0
2006 2007 2008 2009
Interpretation:
This ratio expresses a relationship between the finances in relation with the bank borrowings and
total deposits.
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The bank shows a good percentage in this ratio. As compared to prior 4 years, this ratio is low in
2007 i.e.: 39.6%. It is 51.3% in 2008 and this ratio shows a slight decline in 2009 i.e.: 47.19%
13. Deposit to Total Liability Ratio:
Deposits
Total Liabilities
2007 2008 2009

Years 2006
(%) 87.9 93.7 89.8 94.72
96
94
92
90
(%)
88
86
84
2006 2007 2008 2009
Interpretation:
This ratio compares the total deposits with the total liabilities. This ratio shows a decreasing
trend which means that the bank is increasing its deposits from other people or decreasing its
liabilities.
This ratio is 89.8% in 2008 and BIPL shows a huge increase in 2009 i.e.: 94.72%.
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14. Cash to Deposit Ratio:
Cash
Total Deposits
2007 2008 2009

Years 2006
(%) 63.49 40.37 35.13 22.43
70
60
50
40
30 (%)
20
10
0
2006 2007 2008 2009
Interpretation:
This ratio indicates the banking practice in which a bank lends out most of the funds deposited
and keeps the remaining fraction in reserve in the form of cash.
The figures show a continuous downfall in this ratio. It is 22.43% in 2009 and in 2008, it is
35.13%. This means that the bank is lending most of its deposits as compared to reserves in each
respective year.
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15. Investment to Total Assets Ratio:
Investments
Total Assets
2007 2008 2009

Years 2006
(%) 12.25 26.75 26.3 19.87
30
25
20
15
(%)
10
0
2006 2007 2008 2009
Interpretation:
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This ratio measures the efficiency with which the company is managing its investment as
compared to total assets. This ratio is high in 2007 and 2008; this shows that the bank is
increasing its investments. The ratio is 19.87% in 2009.
16. Cost of Borrowings Ratio:
Return on Deposit
Deposits
2007 2008 2009

Years 2006
(%) 1.05 3.05 5.85 4.37
3
(%)
2
0
2006 2007 2008 2009
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Interpretation:
The ratio shows an increasing trend till 2008. This is because of a valuable return on deposits.
The rise in this ratio shows that the bank operating expenses also increases. But in 2009 it shows
a slight decline. In 2009, this ratio is 4.37%.
17. Current Ratio:
Current Assets
Current Liabilities
2007 2008 2009

Years 2006
(Times) 2.13 1.17 1.025 0.84
2.5
1.5
(Times)
1
0.5
0
2006 2007 2008 2009
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Interpretation:
This ratio measures the company’s ability to meet its current obligations. The ratio shows a
continuous decline. This means that the bank is increasing its current liabilities as compared to
its assets. The ratio is 0.84 in 2009.
18. Debt Ratio:
Total Assets
Total Liabilities
2007 2008 2009

Years 2006
(Times) 1.99 1.36 1.37 1.16
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2
1.5
1
(Times)
0.5
0
2006 2007 2008 2009
Interpretation:
This ratio indicates that what proportion of debt a company has in relative to its assets. The ratio
shows a decline in 2009 as compared to other years. The ratio is 1.16 in 2009.
7. RECOMMENDATIONS AND SUGGESTIONS

for conventional banks we would have proposed…….
“ Early to bed, early to rise
Work like hell and ADVERTISED”
But this is not case with Bankislami. For this we would proposed…..
“ Early to bed, early to rise
Work like hell and IMPROVISE”
Here IMPROVISE stands for:
I INNOVATIONS
M MARKET PERCEPTIONS
P PRUDENCE
R RIFFLE APPROACH
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O OBJECTIVES CLEARLY UNDERSTOOD
V VISION
I IDENTIFYING AND UNDERSTANDING CUSTOMER NEEDS
S SATISFYING CUSTOMER NEEDS
E EDUCATING THE CUSTOMERS
• Marketing and advertising strategy:

Bank must pursue a very aggressive marketing and advertising strategy so that
people become aware of its products and services and to be differentiative and
competitive.
• Misdistribution of work:
There is misdistribution of work; some people are over burdened with the work.
So I suggest that there should be fair distribution of work in all the departments.
• Separate departments:
Bank should establish a separate Marketing and HR department in each branch.
• Expand its network

Should expand its network in rural areas as well as in foreign countries.
• Training programs
Introduce more training programs for their employees. It will help less
experienced workers to grow and become valuable part of bank.
• lack of areas of working

Bahawalpur branch should start working in areas where it is not currently working
like consumer banking, investment banking and corporate banking to attract
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more customers.
• Female staff
There should be female staff to deal with female customer.
• Furniture facility
There should be adequate furniture facility for its customers.
• Incentive schemes
There should be incentive scheme for employees that motivate them which
include personal loans for all ranks of employees, scholarship programs,
employee awards at branch and regional level and job rotation programs to
enhance the skills of employees.
• Amenities in branch:
There should be proper prayer room so that employees can easily offer their
prayer and there should be common room having television and internet
connection so that employees relax in their break.
• number of employees:
There should be enough employees in every branch so that employees have less
workload.
• Internship program
There should be proper internship program and proper stipend should be
provided to internees which will create a positive image of the bank.
• Lockers
Lockers facility should be provided in all branches.
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7. CONCLUSION
The economy of country is booming. The role of banks in today’s economy have
become important one because of the investment in favorable policies and their smooth
implementation.
The banking sector is also reaping the fruits of this economic boom by growing swiftly
over the past few years. There are number of mergers happening in the economy and
foreign investment coming in the banking sector.
Banking history is very old. Modern banking introduce in Islamic countries in 19th
century. Bank is defined as the financial institution which deals in money and credit.
Banks play very important role in the economic life of a nation. The growth of the
economy is dependent upon the soundness of its banking system. Although banks do
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not create new wealth but borrow, exchange and consume. These make generation of
wealth. In this way they become most effective partners in the development of that
country.
First of all commercial banks are established in Pakistan. There were only 2 banks in
Pakistan at the time of partition. In 1979 islamic banking introduce in Pakistan.
Islamic banking:
Islamic banking is a old concept. It has implemented as the only system in two muslim
countries. Islamic banking is present not only in muslim countries but also in non-
muslims countries. in spite of the successful acceptance there are problems. These
problems are in the area of financing.
With only minute changes in their practices, Islamic banks can get rid of all their
burdensome, troublesome and sometimes doubtful forms of financing and offer a clean
and efficient interest-free banking. The entire 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.
This system will offer an effective banking system where Islamic banking is mandatory
and a powerful substitute to conventional banking where both co-exist. furthermore,
such system has no obligation to operate in non-muslim countries.
Unique feature of Islamic banking is a participatory financing and can offer responsible
financing to socially and economically relevant development projects. This is an
additional service Islamic banks offer over and above the customary service provided by
conventional commercial bank.
Islamic banking is defined as banking system i.e. according to the rules and
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regulations of Islamic shariah. Banking in consonance with the ethos and value
system of Islam and ruled in addition to the conventional good governance and risk
management rules, by the principles laid down by Islamic Shariah.
Interest free banking is a narrow concept defining a number of banking instruments or

operations, which avoid interest. Islamic banking, the more general term is expected not
only to avoid interest-based transactions, prohibited in the Islamic Shariah, but also to
avoid unethical practices and participate actively in achieving the goals and objectives of
an Islamic economy.
Islam forbids ‘interest’ but it does not forbid all gains on capital. It is only the increase
predetermined or sought over the principal of a loan or debt that is forbided. Islamic
principles simply require that performance of capital should also be considered while
rewarding the capital. The prevention of a risk free return and permission of trading, as
preserved in the Verse 2:275 of the Holy Quran, makes the financial activities in an
Islamic set-up real asset-backed with ability to cause ‘value addition’.
Islamic banking system is based on risk-sharing, owning and handling of physical goods,
involvement in the process of trading, leasing and construction contracts using various
Islamic modes of finance. As such Islamic banks deal with asset management for the
purpose of income generation. They will have to prudently handle the unique risks
involved in management of assets by adherence to best practices of corporate
governance. Once the banks have stable stream of Halal income, depositors will also
receive stable and Halal income.
Types of businesses allowed by Islam at the time the Holy Quran was revealed include
joint ventures based on sharing of risks & profits and provision of services through
trading, both cash and credit, and leasing activities.
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In the Verse II:275, Allah the Almighty did not deny the apparent similarity between trade
profit in credit sale and Riba in loaning, but resolutely informed that Allah has permitted
trade and prohibited Riba
Profit has been recognized as ‘reward’ for (use of) capital and Islam permits gainful
deployment of surplus resources for enhancement of their value. However, along with
the entitlement of profit, the liability of risk of loss on capital rests with the capital itself; no
other factor can be made to bear the burden of the risk of loss. Financial transactions, in
order to be permissible, should be associated with goods, services or benefits. At macro
level, this feature of Islamic finance can be helpful in creating better discipline in conduct
of fiscal and monetary policies.
Besides trading, Islam allows leasing of assets and getting rentals against the usufruct
taken by the lessee all such things/assets corpus of which is not consumed with their use
can be leased out against fixed rentals. The ownership in leased assets remains with the
lessor who assumes risks and gets rewards of his ownership.
Islamic banking is very much different from conventional banking. The main difference
between them is that Islamic banking is RIBA FREE BANKING. In Islamic banks rate of
return on investment is not fixed whereas in commercial banks it is fixed. Relationship
between costumer and banker is not of debtor and creditor; it is like mudarib and rab ul
maal. Islamic banking growing rapidly now there are 7 full fledge Islamic banks and
some commercial banks also have a separate Islamic banking department.
Internship program:
Internship is necessary for the completion of bba(hons) degree. I have selected
BankIslami for my internship because I want to know about Islamic bankig. People have
different views about Islamic banking. They thought that these banks are deceiving them
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under the name of islam. Before working in BIPL I also think that there is nothing related
to islam in Islamic banking it is like conventional banking the difference between them is
their name. But now after working in BIPL I came to know that Islamic banking is very
much different from conventional banking. It is free from interest that is forbidden in
islam. BIPL is working on all rules and regulations that are giVen by shariah board. BIPL
have unique product and services. I spend six weeks in BIPL and worked in different
departments of bank and gain practical knowledge about all those banking topics that I
studied earlier in my bba program. Below there is brief overview of my intership.
BankIslami Pakistan Limited (the Bank) was incorporated in Pakistan as a public

limited company on October 18, 2004 under the Companies Ordinance, 1984 to carry
out business of an Islamic Commercial Bank in accordance with the principles of Islamic
Shariah. It has been ten years since the establishment of Bankislami, and since its
establishment it has aimed to become the leading bank of Pakistan by that provides
outstanding services to its customers. Logo of bankislami is also unique that represents
that it is a pure Islamic banking and attract large number of customers.
The registered office of the Bank is situated at 11th Floor, Dolmen City, Marine Drive,
Block-4, Clifton, and Karachi. The Bank commenced its operations from April 07, 2006.
The shares of the Bank are quoted on the Karachi Stock Exchange. The Bank is
operating with one hundred and two branches in 49 cities.
BankIslami Mudaraba Investments Limited (Subsidiary company) The subsidiary was

incorporated in Pakistan on January 22, 1986 under the Companies ordinance 1984.
Later on it was registered as a Mudaraba Company with the Registrar of Mudaraba
Companies and Mudaraba (Floatation and Control) Ordinance, 1980. The principal
activity of the subsidiary is to float and operate Mudaraba. The subsidiary is managing its
Mudaraba with the name of MODARBA AL-MALI. The principal place of business of the
Subsidiary is situated at Tenth Floor, Progressive Square, Shah rah -e-Faisal, Karachi.
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Bankislami has four areas of working I.e. retail banking, consumer banking, corporate
banking and investment banking. Major focus of bank is on retail banking. 80% of the
deposits come from retail banking.
The vision of BankIslami is to be recognized as the leading authentic Islamic bank.
The Mission of BankIslami is to create value for Stakeholders by offering Authentic, Shariah
compliant and technologically advanced product and services.
With a diversified portfolio of Shariah compliant products and state-of-the art technology,
bank Islami offers the most comprehensive and authentic Islamic banking solutions. With a
network of 102 online branches in 49 cities and such as Biometric Atm, internet banking, 24/7
phone banking, interbank funds transfer, Deposit ATMs and estatement, bank Islami is truly
serving in the right way. The products offered by bank Islami are following Islami Auto
Ijarah,Islamic current account,Islami Mahana Munafa account,Islami Amdani
certificate,Ijarah,Salam Financing,Musharakah Financing,MUSKUN-Home financing,Islami
Bachat Account ,Murabahah Financing, Islamic Export re-finance,Istisna Financing
,Deminishing Musharkah Financing. And value added services of bank Islami are 24 hours
call center, free ATM, free online, free internet banking, free eStatement, and intra bank
funds transfer etc.
DEPARTMENTS:
The departments that are currently in practice in Bahawalpur branch are Account
opening department, operation department, clearing department, accounts department,
foreign exchange department. But I worked in some departments because of short
period of time.
Account opening department:
It is one of the department that come under retail/general banking facilities provided by
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bankislami. it is basically the first relationship that established between the customer and
banker. Six types of accounts are opened by the bankislami.
Major functions performed by the account opening department are stop payment, bank
statement and bank balance, account opening and closing, issuing cheque book and
loose cheques etc. in account opening department I fill account opening forms. How to
issue cheque books and loose cheques and become familiar about the stamps required
for such process.
Operations department:
Two main functions are performed by operation department: remittance and clearing.
Clearing is the way through which BankIslami clears cheque of other banks and clear
the cheques of its own bank from other banks.Normally clearing is carried out in state
bank of Pakistan but in the areas where there is no branch of SBP national bank work
as subsidiary of SBP.
Remittance means transfer of funds from one place to another. this department perform
the function of transfer of money. The need of remittances is commonly felt in today’s
business. The main function of remittance department in a bank is the transfer of funds.
Cash department:
Cash department is the major point of contact among the customer and the bank. All
cash dealings are done through the cash department and the officer in this department
is called “teller”. His main responsibility is to deal with the cash payment and receipts.
There is a teller dealing with cash payment and receipts separately. Functions
performed by cash department are cash deposit, payment of cheques, cash change and
coins etc. in cash department I learn how to fill deposit slips, how to clear cheque, and
how to identify original note etc.
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I also do SWOT and financial analysis of bank. Financial analysis showed that bank
performance is improving year by year. At the end I give some suggestion and
recommendations because I feel there is a need of improvement in some areas.
Above discussion makes it clear that Islamic banking is not negligible process it is a
complete banking process like conventional banking. Bankislami stands today at a
noteworthy and critical stage as the leading Islamic bank in Pakistan and it is truly
leading the way forward in establishing a real, stable and dynamic Islamic banking
system in Pakistan. The foundation of bankislami based on the guidance of our highly
qualified and globally renowned Shariah Supervisory Board headed by Justice (Retd)
Muhammad Taqi Usmani and including renowned scholars from the Middle East, who
as a whole bring together a rich knowledge base of Islamic Fiqh accumulated over the
past1400 years. Furthermore, with the able support of the SBP's Islamic Banking
Department, all the products offered by the bank are very thoroughly scrutinized by
these Shariah specialists in Islamic finance; hence approval of these products is not
based on unqualified individual opinion or views, but on very sound assessment and
jurisprudence.
The overall analysis of bankislami showed that bank is performing at a satisfactory level
and it is one of the best modern islamic bank in Pakistan because it is providing all
shariah based Islamic products and services by using latest technology. Total deposits.
Total assets, tatal financing, total investment, number of employees, branch network etc
all are increasing at a rapid pace year by year. So we can say that bankislami is moving
towards development and progression by serving its customer at a right way.
Serving you the right way is also the moto of bankislami and team of bankislami proudly
say that they are completing their objective in a most respected way.they welcome and
in fact urge all members of society to come and see themselves that how well they are
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providing services and fulfilling their tasks. Visit any BIPL branch across Pakistan and
allow tha clarity and functionality of Islamic banking model to speak for itself.
In the end I thanks once again to all staff members who gave their precious time and
guide us about the bank. Their corporation and assistance helped me to learn all
practices of banking system. They helped me so much in understanding and gaining the
concepts of Islamic banking. Although the entire staff is very cooperative and helping
but I want to state some names who really helped me in my internship program.
Mr. Hafiz Aqeel (Branch Manager)
Mr. Khurram Rasheed (Customer sales manager)
Mr. M.Asad Mehmood Khan (Customer sales Officer)
Mr. Burhan Ahmed (Customer sales Officer)
Mr. Qaiser (Cash officer)
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Submitted to: Mr.

(Incharge internship and placement)

Submitted by: Khadija hina

Roll number 117

BBA 6th (EVE)

DEPARTMENT OF MANAGEMENT SCIENCES

THE ISLAMIA UNIVERSITY OF BAHAWALPUR

Practice makes man perfect. Theoretical knowledge is not enough. It is useful

Dedicated to HAZARAT MUHAMMAD (Peace Be Upon Him)Who is forever torch of

4.2 OPERATIONS DEPARTMENT.........................................................66

1.1 What is bank?

According to Negotiable Instruments Act (1881) defines:-

According to Banking Companies Ordinance 1962 defines:-

So the comprehensive definition of bank is:

1.2 What is Islamic banking?

Islamic Banking brings economic empowerment to Muslims in the areas of operation.

Islamic banking in Asia pacific region:

Some Islamic financial institutions established in countries where Muslims are a

Islamic banking in Pakistan:

In most countries the establishment of interest-free banking had been by private

The third constitution of Pakistan was passed allowing comprehensive legislation on

The gradual process of implementation of Islamic banking in Pakistan began in

The governments took steps in 1981 to introduce interest-free banking. In Pakistan,

1.6 The Current Picture of Islamic Banking in Pakistan

The names of the seven Islamic banks are:

• Meezan Islamic Bank,

• Al-Baraka Islamic Bank,

• Dubai Islamic Bank,

• Bank Islami Pakistan Limited,

• Emirates Global Islamic Bank Limited

• First Dawood Islamic Bank

• Bank alfalah limited

1.7 Difference between Islamic banking and conventional banking:

* The avoidance of economic activities involving oppression (zulm)

* The avoidance of economic activities involving speculation (gharar);

* The introduction of an Islamic tax, zakat;

(a) Prohibition Of interest in all forms of transactions;

Moreover Islamic banks receive two types of deposits:

The other differences are,

• No predetermined fixed return on customer’s deposits.

e) use of financial resources

f) Equity base banking:-

Accredition By State Bank Of Pakistan

19 August 2004 BankIslami received the No Objection Certificate from SBP

18 October BankIslami became a legal entity after SECP granted it an

2.3 LOGO OF BANKISLAMI:

Our name and logo set the benchmark

A simple, local and Authentic name that leaves

Script and calligrapher:

BankIslami operates by following vision, mission and values.

We differentiate ourselves through:

BankIslami is strongly committed towards its core values of:

Objectives of Bank Islami:

• The main objective of bank Islami is “Serving in the right way”

2.4 CORPORATE INFORMATION OF BANKISLAMI:

Organizational Structure of BIPL

The Board of Directors of BankIslami comprises of eminent representatives from the

• Mr. Ahmed EIshall,

• Mr. Ahmed Randeree,

• Mr. Ali Raza Siddiqui,

• Mr. Hasan A. Bilgrami,

• Mr. Shabir Ahmed Randeree

• Mr. Mohamed Al Amiri.