Islamic Banking by State Bank of Pakistan

Top 20 FREQUENT WORDS

islamic 183 banks 151 percent 82 banking 69 financial 46 sukuk 42 finance 41 assets 40 risk 40 conventional 38 shariah 35 based 27 loans 27 financing 26 credit 25 equity 25 sector 24 pakistan 21 sbp 20 deposits 19 rate 19 ratio 19

DOCUMENT KEY POINTS

after briefly highlighting international developments it discusses the key performance indicators and the financial soundness and stability of islamic banks in the current macroeconomic environment while also giving an assessment of the risks and the key developments during the year

any slowdown if at all will be short run in nature with higher demand expected to be seen in the future as the middle east becomes the new source ifis standard and poor s bastion of financial activity in the wake of the prevailing financial crisis
there were only such sukuk in a in the uae and in malaysia a but in there were such issues spread between malaysia with the uae with and saudi arabia with

global financial crisis and islamic banks since the global financial crisis which started in primarily originated from the suba prime mortgage portfolio which was spun off into securitized instruments subsequently offered as investments an immediate assessment of the impact of the crisis on islamic banks was that they were not affected because islamic finance is based on and reinforces a close link between financial and productive flows

both indicators declined sharply in the subsequent year with a marginal improvement in cy simply due to the enhanced capital and asset base effect the new banks contributed a significant amount to the total capital and asset base of the islamic banking industry but the earnings are still largely concentrated in the two previously established banks in the sector

most importantly islamic banks lack an alternate to the running finance product offered by conventional banks which seriously hampers their competitiveness in tapping a larger share of the market for working capital loans
ijarah and in particular diminishing musharakah now have cy cy cy cy cy cy cy sizable shares

total as reflected in the distribution of assets on the basis of modes of financing islamic banking in pakistan as in some other countries has made little progress in venturing into equity based products which are not only closer to the spirit of islamic finance but can also potentially yield higher returns
month market treasury bills determined one day prior to the start of each month rental period commencing from the issue date of the soneri bank

the low share of equity based financing hampers the growth of islamic finance limits product and risk diversification while also limiting the real benefits which islamic banks can potentially offer to the economy as well as to the society
sector a wise comparison of islamic banks and conventional banks for cy amount in million rupees share in percent banking industry islamic banks share of islamic banks sector no

technically an islamic bank can potentially earn relatively higher non marka up income as its structure is akin to that of universal banking but in pakistan this is not the case as islamic banks have not diversified well into equity based financing and investment banking etc
shows the key cost and earnings ratios of islamic banks which explain the all banks ibs impact of the asseta liability structure of these source ibd sbp banks on their profitability

on closer scrutiny the following features of the asseta liability structure of islamic banks stand out which could potentially have resulted in the existing maturitya gap profile i as most of the islamic banks are still new and have a limited branch network they have yet to accumulate sizeable amounts of current deposits and they mostly rely on fixed deposits of tenors ranging from months to year ii their key slr eligible instruments are not mtbs but sukuk

with an increased focus of the industry and the regulator on product diversification extending outreach strengthening the regulatory framework and the mechanism for shariaha compliance the islamic banking industry is wella positioned to meet the target set out in sbp s strategic plan for achieving a market share of
conclusion islamic banking is one of the fastest growing components of the financial sector despite the challenging environment in which the standa alone islamic banks operate where competitive pressures emanate directly from the conventional banking sector

salient features of these instructions are as under a c every ibi is required to appoint a shariah advisor for a renewable term of three years approved by the board of directors according to the fit and proper criteria for shariah advisors and a clear set of instructions issued by the sbp a c fatwa and rulings of the shariah advisor sa in all financial matters is deemed to be binding on the ibis
comprehensive set of regulations for shariaha compliance in islamic banking institutions one of the landmark developments in the regulatory framework for islamic banking institutions ibis is the promulgation of a comprehensive set of regulations for shariah compliance in ibis issues vide ibd circular no

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DOCUMENT WORD ANALYSIS

Main Category

AlHuda Material\islamic banking

KeyWords

islamic banks banking financial finance investment conventional institutions funds risk financing deposits assets services management international countries equity profit products

DOCUMENT REFERENCES

Number of Pages

15

Published Date

2008-12-15 12:48:06

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Islamic Banking by State Bank of Pakistan

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Top 20 FREQUENT WORDS

DOCUMENT KEY POINTS

DOCUMENT WORD ANALYSIS

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