BURJ BANK LIMITED

ISLAMIC THEORY
AND FINANCE
FINAL PROJECT PRESENTATION
PRESENTED TO: SIR KHALID HUSSAIN
PRESENTED BY: GROUP 3
MBA 3-E

CRITICAL ANALYSIS

FUNDS FOR PROJECTS

Depositors investment in return of profit and loss sharing

Check viability and risks associated with project

Devise risk mitigation strategies.

Keeps in account Asset to Deposit ratio.

Share loss and profit at the end of the project.

Percentage share of Profits is calculated on the basis of

previous months performance.

SHARIAH COMPLIANT?

Three modes of financing to analyze the

operations as Shariah compliant or not?

Murabaha Financing
Diminishing Musharakah Financing
Ijarah Lease Financing

DIMINISHING MUSHARAKAH
FINANCING

Partnership based transaction through which Burj

Bank and its customers contribute their equity at
an agreed ratio

Customer has to pay periodically until all the

shares are being bought and the ownership is
transferred from bank to the customer.

DIMINISHING MUSHARAKAH FINANCING

RISK & MITIGATIONS

SALIENT FEATURES

Diminishing

Musharakah

Agreement

for

Periodical Payment
Undertaking
Authority

to Purchase the Musharakah Units.

letter to be executed by customer in

favor of Burj Bank to make an offer by the client

Payment default

Investing in new projects

Disputes on Documentation.

Provides Mushakarah on Pre-

to sell the ownership in property subject to Sale

& Purchase Back Diminishing Musharakah.
All

agreements/documents are approved by Burj

Bank's Shari'ah Advisor.

Approved loans.

MURABAHA FINANCING

A sale contract in which Burj Bank first

purchases the asset on customers demand and
then sells on an agreed profit to the customer.

MURABAHA FINANCING
SALIENT FEATURES

request is made from the customer. At the same

RISK & MITIGATIONS

Payment default

Fraud.

Keep provision of bad debt

Collection team and recovery team

Installed Trackers

conduct Income assessment of the

time specification of the goods, delivery,place

and other terms of the contract are ensured.
Appointment

of customer as agent of Burj Bank to

acquire the desired asset.

Bank

purchases the goods upon request of the

customer and takes ownership,

Risk

is borne by Burj Bank until the ownership

transferred to the customer.

customer, check his debt burden ratio,

repayment history, credit rating history is
checked for past 6 months

IJARAH LEASE FINANCING

According to Shariah compliant Car Ijarah

financing, Burj Bank gives its car on rental basis to
the customer against agreed payment and period.

After the determined period of Ijarah, customer

may purchase the car at an agreed price or may
return it back to Burj Bank

MURABAHA FINANCING
SALIENT FEATURES
Free

from Riba.

Fully
No
No

RISK & MITIGATIONS

Shari'ah compliant.

up-front insurance payment.

up-front registration fees and

related expenses.
Minimum

Tenor 3 years; Maximum

Tenor 5 years.
Payment

Payment default

Fraud.

Keep provision of bad debt

Collection team and recovery team

Install Trackers

Conduct Income assessment, check debt

burden ratio, repayment history, credit

period:

Monthly/Quarterly/Semi-annually.

rating history is checked for past 6 months

Takaful.