Islamic Finance Pakistan The Islamic Finance Industry Newsletter

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1 Islamic Finance Pakistan The Islamic Finance Industry Newsletter Volume 1 Issue 1 July 2010 That which you give as interest to increase the peoples' wealth increases not with God; but that which you give in charity, seeking the goodwill of God, multiplies manifold, and ward off (from yourself) the fire prepared for disbelievers. And obey Allah and the messenger, that ye may find mercy. (Surah Aal-e-Imran ) Inside story... Editor s Message Shahjahan talks out about the newsletter Special Feature A platform for Islamic finance professionals in Pakistan is in the making. What are the objectives? Moves and Promotions Keep abreast of the latest appointments in town Local and International News Get a glimpse of what has been happening in the world of Islamic finance Feature A quick view on the outlook of financial summary of the Islamic banks and branches In the Spotlight Meet Mehmood Shafqat, take a look at CIE and find your read of the month Upcoming Events 10 Ask Us Seminar on Islamic Investment ing: From Copy to Innovate A seminar on I s lam ic Investment ing: From Copy to Innovate was held on 26 th May 2010 at P e a r l Continental Hotel Karachi under the management of PIFT (Publicitas I s l a m i c Financial Training). A good number of executives from the Islamic finance industry were present at the seminar whose speakers included Syed Amir Ali, EVP & Head of Investment ing Meezan, Mujeeb Beig, Head of Product Development MCB Ltd. and Omar Mustafa Ansari, Partner Islamic Financial Services Group, Ernst & Young Ford Rhodes Sidat Hyder. The seminar was held as a part of the series of such seminars and events by PIFT. Amir Ali talked about Islamic Project Financing and the transaction structure and a detailed regulatory environment as per the applicable rules with respect to each mode of corporate financing under the Islamic financial system. He further talked about Shariah compliance criteria for Equity investments, especially with reference to Private Equity and Venture Capital. Mujeeb Beig talked in detailed about the techniques of matching between the conventional and Shariah compliant investment banking, especially with reference to Ijarah. He also explained in detail the functioning of different types of Sukuk and the applicable Shariah rulings and requirements with special emphasis on Agricultural Sukuk, Sukuk Al-Salam and other various kinds of Sukuk. Omar Mustafa Ansari described in detail investment banking and its Shariah counterpart with special emphasis on Islamic investment banking in Pakistan and the project financing. He also explained Islamic mode of securitization describing in detail its structuring, effects and benefits, risks and mitigants and Shariah compliance alternatives. He also talked about innovative, breakthrough ideas in the field of Islamic finance in relation to investment banking. The seminar was followed by a comprehensive and thought provoking discussion session. The panelists on the discussion forum included Syed Tariq Hussain, CEO-Emirates Global Islamic Ltd., Mufti Najeeb Khan Shariah Advisor Habib Metropolitan Ltd. and Muhammad Aslam Khan, Head of Islamic ing Division Habib Ltd.

2 IFP The Islamic Finance Industry Newsletter PAGE 2 Editor s Message Dear Readers, Assalam-o-Alaikum I was reading an international magazine of repute, The er of UK, and the interesting text I found worth sharing with our friends were Islamic funds performed well in the credit crunch causing many bankers and politicians to accept that Shariah compliant principals could help avoid another financial crisis. Last year in March the Vatican not only paid notice to Islamic finance, it also applauded its ethical philosophy. A lot has been happening around the world in the field of Islamic finance. I believe this is the time that we in Pakistan need to collaborate and work in association to promote the correct awareness of Islamic finance in Pakistan. Our objective of this newsletter is to create a forum where an interaction between the Islamic finance professionals, industrialists, businessmen, households, Shariah advisors, students, and any other stakeholders can be made possible. In this issue you ll find some international and local news, an aerial view of the financials of various Islamic s and IBD s operating in Pakistan, some key personnel movement within or outside the organizations, besides a question answer session with our experts in the field. Your comments and contributions will be highly regarded and sought after. Please take your time to read and send us your opinions and questions to keep this ball rolling. Special Feature Association for Islamic Finance Profession Initial meeting to lay down the foundation of a common forum for Islamic finance professionals The meeting to consider the development of a common platform for the professionals of Islamic finance was held at the premises of Ernst & Young Ford Rhodes Sidat Hyder on 10 June It was attended by a number of renowned professionals from the field. The meeting emphasized on the importance of continuous research and development by the proper think tank functional under high level supervision, contributing in the field of Islamic finance in the country and also that there should be the incorporation of globally evolving rules and regulations regarding Islamic finance. There is a dire need for an appropriate forum, providing platform for Islamic finance to grow and prosper, and for this purpose the forum will be active in providing the needful. Moreover, criticism on Islamic finance should be welcomed constructively to help improve the standard practices. It was urged that the standardization of market practices is of utmost importance via reconciliation amongst different Islamic financial institutions. It was also stressed that the use of Hiba, whether general or specific should be discouraged. The meeting also aimed at making sincere endeavors in improving Islamic banking at the present stage but at the same time Tanqeed, Tanquis, Tardeed, Taqabul and Tehqeer should be refrained from. It was highlighted during the meeting that proper training for the professionals is required, especially for the Shariah Advisors. Also, the rural areas of the country require more of proper trained and qualified professional staff in Islamic finance. It was also discussed that young graduates from Islamic schools should Let us know, if you know any friend or colleague who, in your view, may benefit from this newsletter. Send us their address at ifp@publicitas.com.pk Editorial Advisory Board Mufti Irshad Ahmed Aijaz Mufti Najeeb Khan Anwar Ahmed Meenai Editor-in-Chief M. Aslam Mujeeb Beig Syed Shahjahan Salahuddin Happy reading! Syed Shahjahan Salahuddin Associate Editors Arshad Hussain Zubairi Ayesha Binte Nafees 02

3 VOLUME 1, ISSUE 1 Volume 1 Issue 1 July PAGE be given proper training so that they can effectively contribute towards the Profession. Furthermore, efforts should be made to make available the Islamic ing literature especially in the local language. It was decided that the forum will work for spreading awareness about Islamic finance amongst the masses with the aid of media and also for the betterment of the same. The forum will also provide a platform for interaction of the members through an online discussion board and via regular meetings. It will also create a knowledge base on the subject enabling a continuous growth of the professionals. The forum will maintain a website highlighting the key issues, developments, news and events and will issue periodic newsletters regarding the same. Join Us Become a part of the common platform of the Islamic financial industry. Please contact: Syed Shahjahan Salahuddin ifp@publicitas.com.pk It will also create a knowledge base on the subject enabling a continuous growth of the professionals. The forum will maintain a website highlighting the key issues, developments, news and events and will issue periodic newsletters regarding the same. The forum will arrange a library housing a collection of books on Islamic finance and banking. Habib Limited s M. Aslam had volunteered to arrange the space for library. The idea of having an online collection of books and information on the subject was also brought forth. The day to day affairs of the forum will be run by members on a voluntarily basis. The management and operations of the forum will be carried on as per properly approved bye laws. The bye laws for the meeting, proceedings, procedures and administration of the affairs of the forum will be developed by Omar Mustafa Ansari and Arshad Hussain Zubairi and will be approved by the forum at large. The membership of the forum will be open to everyone from the field and shall be free of cost. The members will work in the interest of the Islamic finance industry and not for individual or corporate benefit. Apart from the professionals, corporations can also become a member making valuable contributions to themselves and to the forum. Moves and Promotions Who..is now where, as what Faizan Memon Head of Product Development, Islamic ing Division Habib Limited Fouad Farrukh Head of Islamic ing Division Faysal Limited Mufti Ehsan Waquar Ahmed Shariah Advisor United Limited Mujeeb Beig Head of Product Development, Islamic ing Division MCB Limited Nusratullah Khan Head of Islamic ing Division Soneri Limited Pervez Said Chief Executive Officer Dawood Islamic Limited Rohail Ali Khan Chief Executive Officer Pak Qatar General Takaful Limited Saleem Ullah Director, Islamic ing Division State of Pakistan Syed Arif Azeem Chief Manager, Islamic ing Group Alfalah Limited 03

4 IFP The Islamic Finance Industry Newsletter Bulletin Board PIFT Training held on Governance in Islamic Financial Institutions A two day training session was arranged by Publicitas Islamic Financial Training on Governance for Islamic Financial Institutions. modes of Islamic banking and finance to better able to accept it. State issued criteria for conversion of conventional branches State issued criteria for conversion of conventional bank branches into Islamic banking branches via IBD Circular No. 02 of The criteria restricted the eligibility of conversion to the branches of only those conventional banks which have Islamic ing Division and a composite CAMELS S rating of at least Fair (3) in the last On-Site Inspection Report. The procedure and detailed criteria for conversion is described in the circular. Ebrahim Sidat, Country Managing Partner Ernst & Young Ford Rhodes Sidat Hyder delivered the inaugural speech. He identified the need for trust and honesty to be a part of our ethical system instead of just relying on formal corporate governance regulations. Omar Mustafa Ansari talked about the conventional and Islamic corporate governance principles and explained in detail the applicable governance guidelines including AAOIFI standards, IFSB and SBP regulations. He also talked about roles and responsibilities of different stakeholders and regulatory bodies with respect to governance in Islamic banking and finance. Pervez Said, CEO, Dawood Islamic Limited was the chief guest at the occasion and distributed the certificates among the participants. Conference on Islamic ing by Memon Professional Forum Memon Professional Forum recently organized a conference on Islamic ing A Myth or Reality. The conference had a number of dignitaries from Shariah, trade and commerce. A thought provoking discussion was carried out on the topic by the speakers and panelists which notably included Dr. Umer Chapra, Mufti Irshad Ahmed Ajaz, Faizan Memon, Ebrahim Qasim, M. Faisal Sheikh and Omar Mustafa Ansari. Dr. Chapra commented on various aspects and economic effects of that Islamic banking while Mufti Irshad maintained that society needs to understand the basis and logic behind the HBL s Islamic banking network increased In a move to strengthen its Islamic banking network, Habib Limited launched seven new dedicated Islamic banking branches on 2 July 2010, one each on Lahore, Islamabad, Multan, Quetta, Mardan, Faisalabad and Karachi. With the addition of new branches, HBL has now a network of 11 dedicated Islamic banking branches. Saleem Ullah appointed Director SBP IBD Saleem Ullah has recently been appointed as the Director of Islamic ing Department, State of Pakistan. He was previously working as Director Development Finance Support Department, SBP-BSC Karachi. Saleem Ullah has an experience of over 15 years in central banking and is a Masters in Public Policy from Harvard University along with an MBA from Bahauddin Zakariya University, Multan. ICAP and Pak Qatar join hands Pak Qatar Family Takaful Limited and Institute of Chartered Accountants of Pakistan (ICAP) have signed an agreement which will give all the members, students and the employees of ICAP across the globe an option of having Group Family Takaful protection through Pak Qatar Family Takaful Limited for ages

5 Volume 1 Issue 1 July 2010 deposited. The insurance system, which is first of its kind in the Arab region, gives Takaful companies a grace period of one year to adjust their status in line with the provisions of the Islamic insurance law. Cham s revenue increased by 96.7% Cham, Syria s 1 st Shariah abiding bank in Syria, said its revenue grew by 96.7% percent in 2009 compared with the previous year s figures. The bank made record high revenues from crediting activities which hit million Syrian pounds before deducting the dividends of depositors, said Jamal Abdul-Hameed Al-Mutawa, Chairman of the bank and former CEO the Commercial of Kuwait. CBB Sukuk Al-Salam Securities oversubscribed The Central of Bahrain (CBB) announces that the monthly issue of the Sukuk Al-Salam Islamic securities has been over subscribed. Subscriptions worth BD 48 million were received for the BD 12 million issue, which carries a maturity of 91 days. The expected return on the issue, which begins on 30 June 2010 and matures on 29 September 2010 is 0.88%. UAE s government issues Laws on Takaful The Ministry of Economy of UAW issued a law on Islamic insurance system (Takaful) to regulate the work of Takaful companies in the country. The insurance system is aimed at regulating the operations of Takaful companies and emphasized on the necessity of Shariah compliance by them. Under the new law, each Takaful company is required to set up a Zakat fund in which Zakat money will be INCIEF establishes special fund for scholarships and R&D activities The international Centre for Education in Islamic Finance (INCIEF) has established a special fund for scholarships and research and development activities. INCIEF was established in 2006 as a global university for Islamic Finance and has received contributions up to RM 909,146 from various local and international financial institutions. The contributions are held up as a special funds, the Financial Assistance and the Fisabilillah Trust Fund. As of date, almost 88% of the amount has been distributed to 251 students from world over based on their academic contributions and potential contribution to the Islamic finance industry. Ernst & Young stresses the need for reforms in tax laws in Germany for Islamic modes of finance In a response to a query by the Central Council for Muslims in Germany regarding the tax assessment of selected Islamic financial contractual models, Ernst & Young issued a report concluding the tax treatments for various modes of debt financing under the Islamic finance. The report maintained that debt financing under Murabaha mode should be treated just as conventional loan for the purpose of income tax assessment, while other modes of financing should be treated as per the specific requirements and the applicable tax laws should be changed accordingly. PIFT Training held on Accounting in Islamic Financial Institutions A two day training course on Accounting in Islamic Finance was recently arranged by Publicitas Islamic Financial Training. Omar Mustafa Ansari and Khurram Jameel (both from Ernst & Young Ford Rhodes Sidat Hyder) were trainers at the course. They talked in detail about the Islamic financial accounting standards, disclosure requirements and Shariah compliance requirements as per SBP s instructions with respect to each specific mode of Islamic banking. Saleem Ullah, Director Islamic ing Department, State of Pakistan was the chief guest at the seminar. 05

6 IFP The Islamic Finance Industry Newsletter Bird s Eye View Take a look at the financial summary of the Islamic banks and the Islamic banking branches for the year 2009 Compiled by Ammar Khalid and M. Ali Khan PAGE 6 Statement of Financial Position S.No. 1. Description Meezan Dubai Islamic Dawood Islamic Emirates Global Islami Al Baraka Alfalah Askari Balances with other financial institutions 39,759,967 5,022,342 3,433,401 2,559,078 6,078,363 7,708,198 7,522,132 1,232, Investments 23,290,309 2,822,723 2,861,751 3,356,705 6,813,191 1,702,599 10,168,389 2,314, Financings 44,188,066 20,589,613 4,763,622 9,439,243 13,282,152 14,755,162 16,920,995 5,872, Total Assets 124,181,734 35,368,894 13,065,908 19,762,450 34,286,771 29,304,960 46,177,327 11,024,711 Due to Financial Institutions 8,468, ,000 1,094,375 20, ,160 2,263, ,107 - Deposits and other accounts 100,333,051 27,980,906 6,784,750 15,081,242 27,987,378 22,636,323 38,464,724 7,457, Total Liabilities 114,997,275 29,328,629 8,224,128 16,268,834 29,546,478 26,551,943 42,331,074 10,106, Net Assets 9,184,459 6,040,265 4,841,780 3,493,616 4,740,293 2,753,017 3,846, ,372 Statement of Comprehensive Income 9. Profit on financings 10,102,060 3,647,145 1,131,873 1,914,228 2,193,891 2,555,597 3,373,900 1,182, Return on deposits 4,969,916 1,805,943 (650,752) 1,234,890 1,222,169 2, ,829, , Provisions 1,519,176 (115,136) 257, , ,198 (453,531) 32, ,484 Net spread after provisions 3,612,968 1,726, , , ,524 61,097 1,447, , Other Income 1,597, ,353 56, , , , ,138 36,949 Administrative and Other Expenses 3,471,049 1,739, ,002 1,436,066 1,766, ,836 1,040, ,001 Profit / (Loss) before taxation 1,739, ,050 (405,152) (798,882) (562,909) (380,634) 701,548 14,692 Profit / (Loss) after taxation 1,025, ,737 (292,627) (564,013) (478,939) (281,548) 701,548 -* * Information not available 06

7 VOLUME 1, ISSUE 1 Volume 1 Issue 1 July PAGE Alhabib of Khyber Faysal HBL HMB MCB RBS SCB UBL Soneri NBP S. No. 2,291 1,397,610 20, , , , ,431 3,040, ,877 48,182 7,740,463 1,671, ,089 1,800,000 1,563, , , ,081,304 1,887, ,173 3,684,234 3,477, ,304 6,474, , , , ,371,220 7,436, , ,207 12,766,894 8,192,073 1,669,815 10,132,371 3,750,522 1,973,425 1,037, , , , , ,134,130 6,091, ,057 18,655 11,074,434 1,956, ,139 8,199,079 2,208,418 1,612, , ,934,169 6,489, , ,762 11,887,384 7,130,520 1,565,087 9,130,190 3,246,228 1,780, , , , , , ,510 1,061, ,728 1,002, , , , , ,489 16, ,172 1,104, , ,663 1,041, , , , , , , ,766 96, , , ,564 83, (11,177) - - (669) 37,736 9, ,492 (93,727) , ,673 15, , , ,678 49, , ,898 41,871 83, ,669 35, ,064 65,918 37,951 4, ,858 8,749 49,946 18, , ,182 16,629 9,226 73, , , , ,000 73, , , ,684 (943) 103, , ,064 (83,133) 324, ,647 18,068 (11,437) 15. -* 298,684 -* -* -* 214,064 -* -* -* -* -* 16. Disclaimer: The data presented in this summary is extracted from the published audited financial statements of the respective banks for the year ended 31 December The newsletter s management does not take any responsibility of authencity of any data presented here and will not assume any liability due to any loss or damage caused by the usage of the information presented here. User discretion advised. 07

8 IFP The Islamic Finance Industry Newsletter PAGE 8 In the Spotlight Understanding Islamic Finance Muhammad Ayub Muhammad Ayub s Understanding Islamic Finance defines, describes and explains the basic principles and procedures of Islamic banking in a very comprehensive manner. It gives an insight into the concepts of Islamic economic and financial system as well as the practices of Islamic finance including contracts, products and systems from the point of view of different schools of thought of Islam. The book explains the Shariah basis, the applicable rules and regulations and in-depth analysis of different modes of Islamic finance. The book also encompasses practical and operational examples of deposit and fund management by banks, financing of various sectors of the economy, risk management, accounting treatments and working of Islamic financial markets and instruments. The author acknowledges and answers the criticism arising from the conceptual differences and also on the practical aspects of the Islamic finance. He states that: The emerging system (of Islamic finance) is subject to a number of myths and severe criticism..by people who visualize an ideal system without giving any weightage to the evolutionary challenges and teething problems and difficulties. The book is a step forward towards the achievement of a standardized and exemplary Islamic financial system. Critics all over the industry has highly appraised the book for its splendid composition and text. Dr. Zamir Iqbal, (World ) comments on the book, This book provides the vital bridge between the legal foundation and the theory of economic and financial systems in Islam. This bridge helps the reader better understand Islamic finance. In short, the book is not only a must read for professionals and students of Islamic finance but should also be a part of their collection as a reference tool. Centre for Islamic Economics Dar-ul-Uloom Founded with the vision to serve as a dynamic platform in making the overall business, financial, social and economic environment conductive for practical implementation of the Shariah guideline, Centre for Islamic (CIE) Economics was started in The main objective of CIE is to propagate the guidelines of an Islamic Economics System by undertaking research to enable the economic, financial and banking activities in Pakistan and other Muslim countries to conform to Shariah and to extend training facilities to personnel engaged in economic development activities in the Muslim world. CIE has been conducted various courses in order to promote awareness about Islamic finance. The courses are both short term certificate courses in Islamic banking and finance and one year Post Graduate Diploma in Islamic ing and Takaful. The PGD course has been really popular among the professionals of Islamic finance and students as the course contents provide comprehensive knowledge and understanding regarding Islamic ing and Takaful under supervision of highly qualified professionals from the practical field of Islamic finance. The courses cover topics such as Sources of Islamic Shariah, Islamic 08

9 Mehmood Shafqat Volume 1 Issue 1 July PAGE Some thing about the man who has been a key tool in the revival of Islamic finance in Pakistan. Currently working as the Additional Director, ing Policy & Regulations Department, State of Pakistan, Mehmood Shafqat has over 17 years of experience in banking and is one of the pioneers of Islamic banking in Pakistan. He is also heading the Corporate Governance Division and Product Review Division of SBP. Mr. Shafqat s role in the development of Islamic banking in Pakistan has been remarkable. He was the part of team who took the responsibility to relaunch the Islamic ing in Pakistan back in year 2000, forming a regulatory and supervisory framework for Islamic banking industry. He played a prominent role in development and promotion of Islamic banking in Pakistan. An MBA from Bahauddin Zakaria University Karachi, Mr. Shafqat also has an Associate Diploma from Institute of ers, Pakistan and has participated in the Board Development Series of Pakistan Institute of Corporate Governance. His contributions towards Islamic banking and other regulatory requirements of banking and finance make a long list. He studied legal and regulatory framework for Islamic banking in other countries and formulated laws and regulations, licensing criteria, off-site supervision system and on-site Shariah compliance inspection framework for Islamic banking in Pakistan. He has a vital role in development of financial instruments and model agreements for Islamic financial institutions, liquidity management instruments government sukuk, R&D and capacity building through membership of various task forces, committees and working groups formed by State of Pakistan and the Federal Government. Mehmood Shafqat is also an active member of IFSB Working Group on Shariah Governance and effectively contributes towards the progress of Islamic banking in Pakistan through training sessions in educational institutes and programs. At present, he is responsible for supervision regulation of corporate governance issues of Islamic banks, conventional banks and DFIs spanning from issues related to shareholders, especially sponsor shareholders, to board of directors, key executives and governance, and regulation of the Islamic banking products of these institutions. Mehmood Shafqat truly believes that Islamic banking is a banking system that reflects the Shariah requirements of Islamic economic system but surely needs a lot to be worked on. He sees that the Islamic banking system in Pakistan needs to develop a comprehensive Islamic financial system fully supported by appropriate infrastructure including laws, regulations, systems & controls, central banking operations, financial markets, academia and research & development in order to implement the Islamic economic system in Pakistan as a role model for the world. economic system, global Islamic banking, types of riba, modes of Islamic leasing, Sukuks, Takaful and other related topics. The faculty includes renowned names amongst Shariah scholars banking professionals such as Mufti Mehmood Ashraf Usmani, Maulana Aziz ur Rehman, Dr. Imran Ashraf Usmani, Mufti Khalil Azami, Mufti Najeeb Khan, Mufti Mohib-ul-Haq Siddiqui, Mufti Asim Yahya. As of now, four PGD batches have graduated from the Institute with a total of approximately 280 students getting their diplomas. ****** The main entrance of Dar-ul-Uloom, Karachi 09

10 IFP The Islamic Finance Industry Newsletter Upcoming Events The upcoming training courses by Publicitas Islamic Financial Training include: Family takaful, a tool for investments Islamic wealth management Global economic crunch and role of Islamic finance Managing funds in line with Shariah Securitization in Islamic finance Dates and venue of the courses will be decided in due course. Interested professionals/institutions may contact Syed Shahjahan Salahuddin at pift@publicitas.com.pk Islamic Finance News Roadshow A one day program under Islamic Finance News Roadshow will be held at Karachi, Pakistan on 5th August The program will include various presentations on different aspects of Islamic finance and will also include comprehensive sessions on various topics. Ask Us! The end result of Islamic ing and Conventional ing is the same i.e. an interest / profit amount is charged to the person acquiring the loan in any form. What is the difference and why do they appear similar apparently? Undoubtedly, in many instances the end result of the processes of an Islamic is same as that of a Conventional. However one thing is for sure that Islamic ing cannot be considered as Haram only because of same end result or mere resemblance. Had end result been the criteria for determining Halal or Haram then a lot of Halal things would have been considered as Haram in Shariah. For example, Sharaih allows earning profit on deferred sale but disallows the profit earned through placement of loan, In Quran Allah Ta ala states: Allah allowed sale purchase (on deferred basis) and prohibited Riba. (Surah e Baqarah Ayat No. 274) But if same end result is taken as a criterion for determining Halal and Haram, then the profit earned through deferred sale should be considered as Haram, on the same basis by renting a land on rent, rental (profit) may be earned and by lending money, interest may be earned but according to Shariah, as every body knows, that the first one is purely Halal, whereas, the later one is Haram. In this case if same end result is taken as a criterion then the first one should be considered as Haram. Therefore, it is concluded that the same end result or mere resemblance is not a criterion for determining that Islamic ing is Halal or Haram. Are not Islamic banks just paying interest and dressing it as profit on trade and investments? No, Islamic banks do not pay or earn interest (Riba) at all. Rather, they generally accept the deposits on Mudaraba basis (a Shariah compliant mode of business) in which profits are distributed according to the agreed ratios and losses, if not suffered due to the gross negligence of Mudarib (working partner), are borne by Rabbul Mal (Depositors) as prescribed by Shariah. Further, they invest these deposits only in those modes of finance which are in line with Shariah. The profits so earned by the Islamic banks are passed on to the depositors according to the preagreed ratios, therefore it cannot be termed as interest because at no time of point the rate of return to the Rabbul Mal was ascertained or fixed by Mudarib. Got some question in mind? Ask us! Feel free to write about your concerns and questions about Islamic finance at ifp@publicitas.com.pk. Our panel of experts from the field will reply your queries. Please note that the queries will only be replied through the newsletter. Our panelists include Mr. Omar Mustafa Ansari, Partner Islamic Financial Group, Ernst & Young Ford Rhodes Sidat Hyder and Mufti Ibrahim Essa, Shariah Advisor to the same. 10