“Faysal Bank Limited (FBL) was incorporated in Pakistan on October 3rd , 1994 as a Public Limited Company under the Companies Ordinance, 1984. The Bank’s shares are listed on Pakistan Stock Exchange. FBL is a complete Islamic bank engaged in Commercial, Retail and Corporate Banking activities. Faysal Bank’s footprint spreads over more than 270 cities and has a network of 700 Islamic banking branches. FBL is operating as a Commercial Bank and State Bank of Pakistan has recently issued an Islamic Banking license making it the second largest full-fledged Islamic bank in Pakistan. Faysal Bank carries on banking business activities in line with the Banking Companies Ordinance, 1962”
Entity Ratings
AA/A-1+
(Double A/A- One Plus)
Stable
Long Term Rating
AA (Double A)
Short term Rating
A-1 Plus(A-One Plus)
Stable
Faysal Asset Management Limited (FAML), an asset management company was launched in 2003 within Faysal Bank Group.
FAML brings together the collective financial expertise and investment experience of Islamic Investment Company of Gulf, with its extensive global fund management experience, Faysal Bank Limited, one of Pakistan’s premier commercial banks. The joint venture partners have international expertise of managing funds in diversified markets around the globe.
FAML has a strong management team and a research based investment structure geared towards providing quality service to its clients. A dedicated research team for each fund works under the supervision of internal investment committee, which is headed by the CEO.
Faysal Islami Currency Exchange Private Limited (FICEC), a licensed exchange company launched in 2024, within Faysal Bank Group.
FICEC specializes in foreign currency exchange, aiming to provide our customers with competitive exchange rates and unparalleled service. Our primary focus is on facilitating seamless transactions in foreign currencies, catering to customers’ diverse needs.
To be the best customer centric Islamic bank, driven by passion and belief.
Achieve leadership in providing Shariah compliant financial services with customer care and employee focus, at the heart of our business ethos together with innovation and technology being the pillars of our growth
Our daily code of conduct is exemplified by the following values:
Ithmaar Bank B.S.C. (stock code “ITHMR”) is a Bahrain-based licensed Islamic retail bank that is regulated by the Central Bank of Bahrain and provides retail, commercial, treasury & financial institutions and other banking services.
Ithmaar Bank is a subsidiary of Dar Al-Maal Al-Islami Trust (DMI), has a paid-up capital of US$701 million, and is listed on the Bahrain Bourse and the Kuwait Stock Exchange.
Ithmaar Bank, formerly an investment bank, completed in April 2010 a comprehensive reorganisation with its then wholly-owned subsidiary, Shamil Bank, to emerge as a premier Islamic retail bank.
Consequently, Ithmaar Bank now provides a diverse range of Sharia-compliant products and services that cater to the financing and investment needs of individuals and institutions. Ithmaar also maintains a presence in overseas markets through its subsidiaries, associated and affiliated companies. These include Faysal Bank Limited (Pakistan), Faysal Private Bank (Switzerland), Sakana Holistic Housing Solutions, Ithmaar Development Company Limited, Bahrain-based BBK, First Leasing Bank, Solidarity (an Islamic insurance company), Naseej and Ithraa Capital (Saudi Arabia). For more information on Ithmaar Bank,
please visit the Bank’s website at
Below you'll find concise answers to some common questions. If you need more detailed information, don't hesitate to reach out to our customer support
A. Faysal Islamic Banking is a division of Faysal Bank Limited which is offering Islamic banking solution through dedicated branches under the State Bank of Pakistan’s Policies for the promotion of Islamic Banking.
A. Islamic Shariah prohibits ‘interest’ but it does not prohibit all type of 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. The prohibition of a risk-free return and permission of trading, as enshrined 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 trade and / or invest in assets / business deals for the purpose of income generation.
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.
Sr. No. |
CONVENTIONAL BANKING |
ISLAMIC BANKING |
---|---|---|
1 |
Money is treated as a commodity besides medium of exchange and store of value. Therefore, it can be sold at a price higher than its face value and it can also be rented out. |
Money is not treated as a commodity though it is used as a medium of exchange and store of value. Therefore, it cannot be sold at a price higher than its face value or rented out. |
2 |
Time value is the basis for charging interest on capital. |
Profit on trade of goods or charging on providing service is the basis for earning profit. |
3 |
Interest is charged even in case the organization suffers losses by using bank’s funds. Therefore, it is not based on profit and loss sharing. |
Islamic bank operates on the basis of profit and loss sharing. In case, the business has suffered losses, the bank will share these losses based on the mode of finance used (Mudarabah, Musharakah). |
4 |
While disbursing cash finance, running finance or working capital finance, no agreement for exchange of goods & services is made. |
The execution of agreements for the exchange of goods & services is a must, while disbursing funds under Murabaha, Salam, Istisna and any other facility contracts. |
5 |
Conventional banks use money as a commodity which leads to inflation. |
Islamic banking tends to create link with the real sectors of the economic system by using trade related activities. Since, the money is linked with the real assets therefore it contributes directly in the economic development. |
A. Faysal Bank Limited started its operations in Pakistan in 1987, first as a branch set-up of Faysal Islamic Bank of Bahrain and then on October 03,1994 it became a locally incorporated Pakistani Conventional bank, under the present name of Faysal Bank Limited. In August 2009, Faysal Bank Limited launched its first dedicated Islamic branch again, in accordance with State Bank of Pakistan’s regulation. Early in 2014, transformation of Faysal Bank Limited to an Islamic Bank was announced.
A. Faysal Islamic Banking staff is well experienced and committed to promoting the cause of Shariah banking. Faysal Bank’s Shariah Board comprises of well-known and qualified Shariah Scholars who considers, decides and supervises all Shariah related matters of the Bank.
Faysal Islamic Banking has one of the most comprehensive Islamic deposit product menus in the market, both in local and foreign currencies. Our Islamic deposit products are based on Shariah Compliant modes of Qard, Mudarabah and Musharakah.
A. Faysal Islamic Bank invests their depositors’ funds (net of CRR / SLR requirements specified by SBP from time to time) in Shariah compliant modes of financing such as:
A. Profit Sharing between Faysal Islamic Bank & the Customer is executed through an Islamic Banking model known as Profit & Loss Sharing (PLS) mechanism.
A. All deposits mobilized through Faysal Islamic Banking Branches are used for providing financing / investment under Islamic modes (as mentioned above). Profits earned from these financing/investments are shared with the depositors.
Hence, the deposits do not include with interest in any way,
A. Profit Sharing between Faysal Islamic Bank & the Customer is executed through an Islamic Banking model known as Profit & Loss Sharing (PLS) mechanism.
This is how it works…
* Announced before the start of the month.
Note: The above example is of a Profit Distribution scenario, where the Bank’s own equity is not involved
A. No. Islamic banks operates on Profit & Loss mechanism (as explained in detail above). Profits earned from investment in Islamic Financing is distributed amongst depositors as per weightages (announced 3 working days prior to the start of every month) applicable for the concerned month.
However, the customers’ respective branch can be consulted for an expected rate of return (which may be different than the actual rate announced after the end of the month and execution of PLS mechanism, depending on the income generated.)
Customers can also view the historical declared rate sheets (which are displayed in all Faysal Islamic Banking Branches and uploaded on the Banks website) in order to gauge the Banks Business performance and what kinds of returns to expect.
If loss is occurred without any gross negligence and willful misconduct on part of the Bank, then Loss will be shared amongst depositors as per their share of investment.
A. Following are the main modes of Islamic banking and finance
Murabaha is one of the most common modes used by Islamic Banks. It refers to a sale where the seller discloses the cost of the commodity and amount of profit charged. Therefore, Murabaha is not a loan given on interest rather it is a sale of a commodity at profit.
The mechanism of Murabaha is that the bank purchases the commodity as per requisition of the client and sells him on cost-plus-profit basis. Under this arrangement, the bank is bound to disclose cost and profit margin to the client. Therefore, the bank, rather than advancing money to a borrower, buys the goods from a third party and sells those goods to the customer on profit.
Musawamah is a general and regular kind of sale in which price of the commodity to be traded is agreed between the seller and the buyer through the normal process of bargaining, without any reference to the price paid or cost incurred by the former. Thus, it is different from Murabaha in respect of pricing formula. Unlike Murabaha, the seller in Musawamah is not obliged to reveal his cost. All other conditions relevant to Murabaha are valid for Musawamah as well. Musawamah can be used where the seller is not in a position to ascertain precisely the costs of commodities that he is offering to sell. Like Murabaha, Musawamah can be on the basis of spot payment of Price or it can be a credit sale.
Ijarah refers to transferring the usufruct of an asset but not its ownership. Under Islamic banking, the bank transfers the usufruct to another person for an agreed period at an agreed consideration. The asset under Ijarah should be valuable, non-perishable, non-consumable, identified and quantified. All those things which do not maintain their corpus during their use cannot become the subject matter of Ijarah, for instance money, wheet etc.
it is a contractual agreement for manufacturing goods and commodities, allowing cash payment in advance and future delivery or a future payment and future delivery. Istisna’a can be used for providing the facility of financing the construction of houses, projects, bridges, roads and highways or fabrication / manufacture of plants & machinery.
Salam means a contract in which advance payment is made for goods to be delivered later on. The seller undertakes to supply some specific goods to the buyer at a future date in exchange for an advance price fully paid at the time of contract. It is necessary that the quality of the commodity intended to be purchased is fully specified leaving no ambiguity leading to dispute. The objects of this sale may be any kind of goods but cannot be gold, silver or currencies. Barring this, Bai Salam covers almost everything, which is capable of being definitely described as to quantity, quality and workmanship.
A form of partnership where one party provides the funds while the other provides expertise and management. The latter is referred to as the Mudarib. Any profits earned are shared between the two parties in a pre-agreed ratio, while loss is borne only by the provider of the capital.
Musharakah means a relationship established under a contract by the mutual consent of the parties for sharing of profits and losses in the joint business. It is an agreement under which the Islamic bank provides funds, which are mixed with the funds of the business enterprise and others. All providers of capital are entitled to participate in management, but not necessarily required to do so. The profit is distributed among the partners in pre-agreed ratios, while the loss is borne by the partners strictly in proportion of their respective capital contributions.
For more information, please call our Contact Centre at 111 06 06 06 or visit your nearest Faysal Islamic Banking branch.
Disclosures in Islamic banking ensure transparency and informed decision-making.
PER is a mechanism which acts to mitigate the fluctuation of Profit rates arising from the flux of income or vice versa and movement in total deposits in the Mudarabah Pool.
The creation of PER is to ensure that FBL IBD profit rates remain competitive and stable. During times of low returns to depositors and investors, FBL IBD can choose to utilize/draw from PER to improve and stabilize the Rate of Return to its depositors and investors and incase of high returns than expected FBL IBD can choose to build by adding to PER from Net income of the pool.. Essentially, PER is a tool to provide stability in Mudarabah returns over a long period of time.
FBL IBD may maintain Profit Equalization Reserve (PER) from Net Income of Pool i.e. the gross income less direct expenses and losses if any.
The monthly contribution into PER is not to exceed 2% of Net Income, and the accumulated balance of PER is not exceed 30% of FBL IBD Fund to ensure a balance between relationship as Mudarib & Rabb-ul-Mal
50% of the balance available in PER will be reflected as liability and remaining 50 % as reserve in the books of the FBL IBD.
The funds of PER will be y invested in Shariah compliant SLR eligible securities and the returns earned on these funds will be credited into the PER account. The profit sharing ratio (PSR) for FBL IBD as Mudarib is not more than 10% for managing PER. For example PER earns PKR 100, FBL IBD will charge PKR 10 as PSR for Mudarib service provided. PKR 90 will be credit to PER in pool.
The FBL IBD may fully or partly utilize/the amount of PER to improve the returns to the depositors during periods when the pool’s profits are below market expectations.
The clause related to PER is part of account opening form or any other document for this purpose.
PER is a tool for smoothing of and does not guarantee the capital or profit in case of loss to the PLS depositors/investors.
As the credit and market risk of the financing and investment portfolio is to be borne by depositors being Rabb-ul-Mal in the Mudarabah arrangement with the FBL IBD , there may be scenarios where the pool may incur losses primarily due to unusually large write-offs and/or significant losses on sale of the pool’s investments. Thus to absorb/off-set such losses FBL IBD may create the Investment Risk Reserve (IRR) to cover the future investment losses and develop models and basis to determine the size of the IRR and the periodic contributions to be made to build up the IRR. Till the development of the model, FBL IBD may contribute towards IRR an amount up to 1.0 percent of the profit available for distribution amongst the pool’s depositors after deduction of Mudarib share in every profit period.
As the credit and market risk of the financing and investment portfolio is to be borne by depositors being Rabb-ul-Mal in the Mudarabah arrangement with the FBL IBD , there may be scenarios where the pool may incur losses primarily due to unusually large write-offs and/or significant losses on sale of the pool’s investments. Thus to absorb/off-set such losses FBL IBD may create the Investment Risk Reserve (IRR) to cover the future investment losses and develop models and basis to determine the size of the IRR and the periodic contributions to be made to build up the IRR. Till the development of the model, FBL IBD may contribute towards IRR an amount up to 1.0 percent of the profit available for distribution amongst the pool’s depositors after deduction of Mudarib share in every profit period.
The funds of IRR will be invested in Shariah compliant SLR eligible securities and the returns earned on these funds will be credited to the IRR account. The profit sharing ratio (PSR) for FBL IBD as Mudarib is not more than 10% for managing IRR. For example IRR earns PKR 100; FBL IBD will charge PKR 10 as PSR for Mudarib service provided. PKR 90 will be credit to IRR in pool.
The losses, if any, incurred by the pool will be covered from the balance available in IRR.
The clauses related to IRR are part of account opening form or any other document for this purpose.
Faysal Bank strongly believes in giving back to the community in every best possible way for its sustainability. Collectively, we have to put in cohesive efforts so that the ommunity around us becomes strong enough to see many generations after us benefiting from it.
In alignment with Faysal Bank’s new Islamic identity, it has embarked on a holistic strategy under the guidance of the Board which aligns the bank’s vision to evolve its Corporate Social Responsibility strategically in resonance with its Islamic values and mission. Thus, all CSR activities carried out by the bank are in furtherance of Islamic values. It also endeavours to ensure that the benefit of these CSR activities reach to the societies/geographies where it provides banking services. Faysal Bank’s CSR mission is "to establish, operate and/or assist any non-profit institution for charitable purposes, including relief to poor, education, environment, medical relief and advancement of any general utility".
To achieve this mission, Faysal Bank undertakes the following activities: