Islamic Finance

Islamic Finance

Contents

1.Company Profile41.1History41.2Vision41.3Mission41.4Corporate Information42.Modes of Islamic Financing62.1Mudarbah62.2Diminishing Musharka Financing82.3Murabahah92.4Ijara102.6Burj Car Financing112.5Takaful plan113.Reference13

1. Company Profile

1.1HistoryBurj Bank Limited, formerly known as Dawood Islamic Bank Limited (DIBL), is Pakistan's sixth full-fledged Islamic commercial bank. The bank received its license from the State Bank of Pakistan in May 2006, and officially commenced its operations on Friday, April 27, 2007. The Bank was the result of an initiative of the First Dawood Group, with the Islamic Corporation for the Development of the Private Sector (ICD) in Jeddah, Unicorn Investment Bank in Bahrain, Al Safat Investment Company in Kuwait, Gargash Enterprises (LLC) in Dubai, the Singapore-based entrepreneur Azam Essof Kolia and Shaikh Abdullah Mohammad Al-Romaizan, an entrepreneur from the Kingdom of Saudi Arabia. In July 2011, the bank was renamed Burj Bank Ltd.1.2Vision To be the Islamic Bank of Choice.1.3Mission Provide innovative and efficient Islamic banking solutions to exceed customer expectations and optimize shareholder value.

1.4Corporate InformationBoard of Directors Mr. Khaled Mohammad Al-Aboodi ChairmanMr. Shehab M. GargashDirector / Vice ChairmanMr. Ahmed Khizer Khan Director / President & CEOMr. Adel Yousef Al-Saqabi DirectorMr. Azam Essof Kolia DirectorMr. Basheer A.Chowdry DirectorMr. Jamil Ahmed Qureshi DirectorMr. Mohammed Tariq Director(Resigned on March 1, 2012)Mr. Nicolas Edouard Martin Director

Company Secretary Mr. Amin Hussain(Effective from March 5, 2012)

Audit Committee Mr. Jamil Ahmed Qureshi ChairmanMr. Azam Essof Kolia MemberMr. Basheer A. Chowdry Member

Shariah Advisor Prof. Mufti Munib-ur-Rehman

Legal Advisor M/s. Mohsin Tayebaly & Co. Advocates & Corporate Legal Consultants

Auditors M/s. A. F. Ferguson & Co. Chartered Accountants

2. Modes of Islamic Financing

2.1Mudarbah

Mudarabah is a special kind of partnership where one partner gives money to another for investing it in a commercial enterprise. The investment comes from the first partner who is called rabb-ul-mal, while the management and work is an exclusive responsibility of the other, who is called mudarib. Buraj Bank adopts this mode by offering Buraj PLS Saving Account, Buraj Smart Saving, Buraj Monthly Income Account, Buraj Term Deposit Certificates.Burj PLS saving accountBank is offering attractive profit rates in its Savings products based on deposit tiers and at the same time allowing customer to make transactions on his account without any limits.

Features and benefits Attractive tiered profit rates. Profit calculated on daily basis with monthly and half yearly payout. Unlimited number of transactions free of charge. Free online banking. Unmatched services available at Burj Bank branches present nationwide.

Burj term deposit certificatesBurj invest your money elsewhere when Burj Bank is offering the most attractive profit rates for those who are interested in saving their hard earned money for a longer period of time and reap handsome income every month,in a halal manner.

Features and benefits Minimal initial investment amount. Flexible tenures ranging from 7 days / 1 month / 3 month / 6 month / I year / 3 years and5 years Profit paid out monthly / quarterly / semi annually or at maturity Attractive profit rates Pre-mature withdrawal facility available

Burj smart saving Burj Smart Saving is a unique Shariah compliant savings account that gives you Halal profit on your savings while offering you the liberty to make unlimited transactions,anywhere anytime. So its about time to opt for the best and the most convenient account because only Shariah leads to prosperity.

Features and benefits: Attractive profit rates. (tier based) Profit calculated on daily basis with monthly payout. Unlimited number of transactions free of chargeAdditionally enjoy free services ATM Card Cheque Book

2.2Diminishing Musharka Financing

Plant, Machinery, Equipment and Factory building Diminishing Musharakah is a Shirkah (partnership) based transaction through which Burj Bank and its customer contribute their equity at an agreed ratio for the purchase of equipment/machinery and other tangible assets. Request from the customer to Burj Bank for the purchase of specific equipment or machinery. Burj Bank and the customer jointly contribute their share of equity at an agreed ratio to purchase the equipment/machinery by executing a Diminishing Musharakah Agreement. Burj Bank's share is divided into monetary units subject to purchase by its customer periodically until such time that the sole ownership of equipment/machinery is transferred in the name of the customer. Besides purchase of Burj Bank's equity periodically, the customer utilizes the usufructs/benefits of the equipment/machinery and pays agreed consideration to Burj Bank, periodically.Tractors to Farmer Burj Bank Limited is the 1st Islamic Bank in Pakistan which recognizes the need of the farmers and provides you financing facility for purchasing of tractor on the basis of Diminishing Musharakah.As continuing security for the obligations of the customer, the following documents shall be executed between Burj Bank and the customer: Diminishing Musharakah Agreement. Agreement for Periodical Payment (Monthly/Quarterly/Semi-Annually). Undertaking to Purchase the Musharakah Units. Authority letter to be executed by customer in favor of Burj Bank to make an offer by the client to sell the ownership in property subject to Sale & Purchase Back Diminishing Musharakah. The customer shall create a charge over the equipment/machinery in favor of Burj Bank. All agreements/documents are approved by Burj Bank's Shari'ah Advisor.

2.3Murabahah A contract of sale between a customer and Burj Bank Limited (Burj Bank) under which Burj Bank first purchases the goods (permissible under Shari'ah) at the request of the customer and then sells these goods to the same customer after adding profit. The Murabahah Sale Price includes all acquisition costs borne by Burj Bank and a mutually agreed profit. Murabahah transactions at glance Request from the customer to Burj Bank for the purchases of specific local / imported goods. Appointment of customer as agent of Burj Bank. Bank purchases the goods upon request of the customer and takes ownership, thus transforming its money into goods. After purchase of goods the risk of the goods is borne by Burj Bank until the ownership of the goods is transferred to the customer by way of offer and acceptance.Burj bank Murabahah financing is available for important and local purchase: Raw Materials Commodities Equipments/Machinery Other tangible assets

Types of Murabahah1. Spot Payment Murabahah - Immediate repayment in cash against Letters of Credit (Sight).2. Deferred Payment Murabahah - Repayment on mutually agreed future date.

2.4Ijara

Ijara is an Islamic mode of leasing and can be used for assets that are not consumed while they are in use, for instance, it can be a house, car or any other tangible asset. During the tenure of Ijarah financing the asset given by the bank remains in Burj Bank's ownership and all risks are borne by the Bank. According to Shari'ah 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.

Silent features of Ijara: Free from Riba. Fully Shari'ah compliant. No up-front insurance payment. No up-front registration fees and related expenses. Minimum Tenor 3 years, Maximum Tenor 5 years. Payment period: Monthly/Quarterly/Semi-annually.

Fleet FinancingBurj Bank offers fleet financing facility under Ijarah mode of financing to suit the specific requirements and financial needs of Corporate and SME customers.Features Maximum period Five (05) Years. Quick approval process Minimum documentation required Title of Ijarah vehicle in the name of Burj Bank Comprehensive Takaful of the Ijarah Assets Profit Rate:1 Year / 6 Month KIBOR + Spread (to be recovered along with monthly rentals)

2.6 Burj Car Financing

Burj Carsaaz provides you with the easiest and fastest processing of auto finance facility. With Burj Carsaaz you can have a car of your own choice without being heavy on your pocket. You are a salaried individual or a businessman. Burj Carsaaz is designed to meet vehicle finance needs of those who are aspiring to drive a new vehicle or change their existing ones.Facilities Minimum and Maximum Financing Limit > PKR 0.2 Million PKR 10 Million Tenors:1 year to 5 years Floating profit rates renewable each year Mandatory takaful and tracker installation Financing new used and reconditioned / imported vehicles Minimum Security deposit to be 10% Age limit between 22 years to 65 years Co borrower facility

2.5Takaful planTakaful comes from the Arabic word 'Kafala' - to guarantee. Takaful is not only a tool to mitigate loss or to make Halal profits; it is an ideology which promotes: Solidarity and joint guarantee Self reliance and self sustainability for community well being Assistance to the needy Community pooling systemProduct features of takaful Saving for long term requirements (child education, purchase of property, retirement, marriage, etc.) Regular contributions are invested in a diversified portfolio of Islamic funds ranging from Sukuk to Mutual Funds. Flexible payment plan. Takaful cover allows family to receive funds in case of death of the participant.

Benefits of takaful Access to a wider range of Shari'ah Compliant financial products and services. No need for further documents except Customer ID card No need for medical exams (conditions apply) No need to wait for manual underwriting. Total sales process takes 30 minutes Customer Service Available 24/7 at your nearest Burj Bank branch or Burj Phone Banking. Transparent terms, conditions and charges structure.Additional benefits Increase and decrease your contributions Switch Investment Strategies Partial Withdrawal Payment Deferral

3. Reference

www.burjbankltd.comSuperior University LahorePage 13