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About Us

Introduction

Brief History

“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”

Credit Ratings
JCR-VIS Credit Rating Company

Entity Ratings

AA/A-1+
(Double A/A- One Plus)

Stable

PACRA Pakistan Credit Rating Agency Limited
JCR-VIS Credit Rating Company

Long Term Rating

AA (Double A)

Short term Rating

A-1 Plus(A-One Plus)

Stable

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  • 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.

Vision, Mission, & Values

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Vision

To be the best customer centric Islamic bank, driven by passion and belief.

Mission

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

Values

Our daily code of conduct is exemplified by the following values:

  • Faith & Belief
  • Integrity
  • Teamwork
  • Innovation
  • Care

Group Information

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

www.ithmaarbank.com

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Board of Directors

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Chairman

Mian Muhammad Younis
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Vice Chairman

Mr. Ahmed Abdulrahim Mohamed Abdulla Bucheery
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President & CEO

Yousaf Hussain
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Director

Mr. Imtiaz Ahmad Pervez
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Director

Mr. Ali Munir
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Director

Mr. Juma Hasan Ali Abul
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Director

Mr. Abdulelah Ebrahim Mohamed AlQasimi
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Director

Ms. Fatima Asad Khan
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Director

Mr. Mohsin Tariq
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Director

Ms. Sadia Khan
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Senior Management

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President & CEO

Mr. Yousaf Hussain
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Chief Operating Officer

Raheel Ijaz
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Chief Financial Officer

Syed Majid Ali
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Head, Treasury & ECM

Shuja Haider
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Head Innovation

Syed Tahir Rizavi
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Head, Internal Audit

Nasir Islam
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Head, Retail Banking

Jaudat Hussain
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Chief Digital Officer

Amin ur Rahman
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Head, Compliance

Abadullah
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Head, Corporate & Investment Banking

Ali Waqar
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Chief Risk Officer

Mian Salman Ali
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Head, Special Assets Management

Bashir Ahmed Sheikh
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Head, Operations

Syed Muhammad Fraz Zaidi
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Head, Human Resources

Monis Mirza
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Head, Consumer Finance & Payment Services

Aneeq Malik
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Chief Information Officer

Syed Hasan Jafri
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Head Islamic Banking

Muhammad Faisal Shaikh
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Company Secretary & Head, Legal

Muhammad Aurangzeb Amin
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Shariah Board

Shariah Scholars

Shariah Board is responsible for ensuring that Shariah guidelines are strictly adhered to in all Islamic banking operations and activities of Faysal Bank Ltd. The Shariah Board at Faysal Bank Limited comprises of renowned Shariah Scholars, namely:

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Mufti M. Mohib
ul Haq Siddiqui

Chairman – Shariah Board

Mufti Mohib ul Haq is a prominent and a well-recognized Shariah scholar of international repute. His credentials include a specialized degree in Shahadat-ul-Aalamia (Masters in Arabic and Islamic Studies) and Al-Takhassus fial-Iftaa’ (Specialization in Islamic Jurisprudence and Fatwa) from the esteemed Jamia Darul Uloom, Karachi, under the guidance of Justice Retd. Mufti Taqi Usmani

Mufti Mohib ul Haq has a diversified experience of more than 21 years in Islamic Finance Industry. He has been associated with Faysal Islamic Banking since 2011, as the Shariah Advisor, prior to his appointment as the Chairman Shariah Board. He is also a Shariah Board Member of Bank Alfalah Limited and Bank Al Habib Limited.

Previously, he has served as the Shariah Advisor / Shariah Board Member at various Financial Institutions which include:

  • Takaful Pakistan Limited
  • Royal Bank of Scotland Berhad, Malaysia
  • JS Islamic Mutual Fund

Mufti Mohib ul Haq has significant research experience related to Islamic Finance and other Shariah related subjects. Further, he is also a member of the State Bank of Pakistan’s Committee for Shariah review, standardization of Islamic products and processes, and formalization of Accounting & Auditing Organization for Islamic Financial Institutions (“AAOIFI”) Shariah standards for the Pakistan banking industry. He is also an experienced lecturer and trainer in the field of Islamic Finance, Fiqh and Islamic Financial Laws at various institutions which include:

  • Jamia Darul Uloom, Karachi
  • Centre for Islamic Economics (“CIE”)
  • National Institute of Banking and Finance (“NIBAF”) – SBP
  • Institute of Cost and Management Accountants of Pakistan (“ICMA”)
  • Institution of Business Administration- Centre for Excellence in Islamic Finance (“CEIF”)

Dr. Mufti Khalil
Ahmad Aazami

Shariah Board

Dr. Mufti Khalil Ahmad Aazami is a renowned Shariah Scholar in the Islamic Banking industry. Dr. Aazami has graduated from Jamia Darul Uloom, Karachi. He obtained his Shahadat-ul-Aalamia (Masters in Arabic and Islamic Studies) and Al-Takhassus fi al-Iftaa’ (Specialization in Islamic Jurisprudence and Fatwa) from Jamia Darul Uloom, Karachi, under the guidance of Justice Retd. Mufti Taqi Usmani. He holds a Ph.D. in “Islamic Jurisprudence” from University of Karachi.

Dr. Aazami is working with Bank Alfalah Limited-Islamic Banking since 2003 in the capacity of Shariah Advisor and now serving as Chairperson Shariah Board since 2015. He is also a Shariah Board Member of National Bank of Pakistan-Islamic Banking and Faysal Bank Limited.

Dr. Aazami has served as Shariah Advisor / Shariah Board Member in different financial institutions including:

  • Takaful Pakistan Limited (2005 - 2014)
  • Alfalah GHP Islamic Fund (2007 - 2014)

Dr. Aazami has significant research experience related to Islamic Finance and other Shariah related subjects. Furthermore, he is the member of AAOIFI Shariah Standards Committee (Karachi). He is an author of numerous publications. He is also an experienced lecturer and trainer in the field of Islamic Finance, Economics, Fiqh, Islamic Financial Laws and General Islamic Science at various institutions which include:

  • Jamia Darul Uloom, Karachi
  • Centre for Islamic Economics (“CIE”)
  • National Institute of Banking and Finance (“NIBAF”) – SBP
  • Sheikh Zayed Islamic Centre - University of Karachi
  • Institution of Business Administration- Centre for Excellence in Islamic Finance (“CEIF”)

Mufti Abdul Basit

Resident Shariah Board Member

Mufti Abdul Basit has been serving as a Shariah Board Member at Faysal Bank Limited since 2021. Prior to this role, he held the position of Shariah Support at the Product Management and Development Department of Faysal Bank Limited.

Mufti Abdul Basit holds both contemporary and religious academic qualifications. He obtained a Shadat-ul-Aalamia (Masters in Islamic Studies & Arabic) from the esteemed Jamia Darul Uloom, Karachi, under the guidance of Justice Retd. Mufti Taqi Usmani and Takhassus Fiqh-ul-Muamlaat from Jamia Tur Rasheed, Karachi. Additionally, he holds a graduation degree in Commerce from the University of Karachi.

With wide-ranging professional and educational experience, Mufti Abdul Basit brings valuable expertise to his roles. He possesses extensive experience in Islamic Banking. Furthermore, he has a significant background in teaching, having served as a Permanent and Visiting Faculty Member at renowned institutions such as;

  • Sheikh Zyed Islamic Centre - University of Karachi
  • IBA - CEIF (Centre for Excellence in Islamic Finance)
  • AL – Ihsan Courses.

Mufti Abdul Basit is a Certified Shariah Adviser & Auditor (CSAA) recognized by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), Bahrain. He has also completed the NIBAF Islamic Banking Certificate Course - Capacity Building of Shariah Scholars organized by the National Institute of Banking and Finance, State Bank of Pakistan. Additionally, he is a certified professional trainer accredited by IAPPD and registered as a Shariah Advisor with the Securities and Exchange Commission of Pakistan (SECP).

Mufti Muhammad
Najeeb Khan

Shariah Board Member

Mufti Muhammad Najeeb Khan is esteemed as a prominent Shariah scholar, boasting a distinguished educational background with specialized degrees in Shahadat-ul-Aalamia and Al-Takhassus fial-Iftaa’ from the esteemed Jamia Darul Uloom, Karachi, under the mentorship of Justice Retd. Mufti Taqi Usmani.

His extensive experience in the Islamic Finance Industry last twenty-five years is evident through his multifaceted roles. Currently, he serves as a Chairman Shariah Board Bank Makrama Limited and as well as Shariah Board Member of Faysal Bank Limited, and as a Shariah Advisory Board member for UBL’s United Composite Islamic Fund . Additionally, he was holding the esteemed position of Chairman Shariah Board at Sind Bank Limited and acts as an advisor and member to various financial institutions including Habib Bank AG Zurich, Habib Metropolitan Bank , Shariah Board SECP furthermore he served Educational Institution including Hira Foundation School, Hira Institute of Emerging Sciences, and the Centre for Islamic Economics, Syndicate member of NED University Karachi.

Mufti Najeeb actively contributes to the development and standardization of Islamic finance practices, serving on several committees including the Shariah Committee for Shariah Standard Pakistan Chapter AAOIFI, and the Committee of Islamic Accounting Standards. He has been an integral part of the Committee on Accounting and Auditing Standards for Interest-Free Modes of Financing and Investments in ICAP since 2003. Additionally, he plays a significant role in halal standards, serving as Vice Chairman of the Technical Committee on Halal Pharma Standards and Senior Member National Halal Standards Committee and Member Technical Committee on Halal Conformity Assessment Standard, Chairman of the Shariah Board for the Halal Awareness and Research Council.

His commitment to education and training is evident through his involvement as a trainer with prestigious institutions such as NIBAF (SBP), IDB, IBA, LUMS, Karachi University, and the Halal Committee of OIC. Internationally, Mufti Muhammad Najeeb contributes to the development of Islamic education curriculums in Daru Uloom College of Victoria and lectures at institutions such as U.M.M.A Centre and Islamic Centre in Victoria, Australia. He also serves as an advisor in Islamic finance to various financial institutions in Australia and is a Senior Member of Majlis Ulama in Australia.

Mufti Muhammad Najeeb Khan's diverse portfolio of engagements underscores his dedication to advancing Islamic finance principles globally and promoting education in the field.

Dr Mufti Muhammad
Hassan Ashraf Usmani

Shariah Board Member

Dr Hassan Usmani, son of Justice ® Mufti Mohammed Taqi Usmani, is an esteemed scholar renowned for his profound expertise in Islamic finance. With a robust educational background, he holds a Ph.D. in Islamic Finance, specializing in AAOIFI Shariah Standards. Additionally, he has acquired specialized degrees in Shahadat-ul-Aalamia and Al-Takhassus fial-Iftaa’ from the prestigious Jamia Darul Uloom, Karachi, under the guidance of Justice Retd. Mufti Taqi Usmani.

Presently, Dr Usmani serves as a Shariah Board Member at Faysal Bank Limited and Atlas Asset Management Company. Notably, he has previously held positions as the Chairman Shariah Board and Resident Shariah Board Member at Sindh Bank Limited. In addition to his banking engagements, Dr Usmani contributes to academia as an instructor in various Shariah subjects and assumes administrative responsibilities at Jamia Darul-Uloom Karachi. Moreover, he provides advisory services to a range of institutions, including the Kashif Iqbal Thalassemia Care Center and the Centre for Islamic Economics. Furthermore, he holds the position of Assistant Professor and Head of Department for the Islamic Banking and Finance program at Greenwich University.

Dr Hassan Usmani plays a pivotal role in shaping Islamic finance standards in Pakistan, serving as a member of the State Bank of Pakistan’s Committee for Shariah review and standardization of Islamic products and processes. He is actively involved in the formalization of AAOIFI Shariah standards for the banking industry.

As an accomplished author, Dr Hassan Usmani has published numerous research papers on Islamic finance and related Shariah subjects, reinforcing his expertise in the field. His multifaceted contributions underscore his commitment to advancing Islamic finance principles and promoting excellence in academia and industry alike.

Mufti Muhammad Uzair Qasim

Shariah Board Member

Mufti Muhammad Uzair Qasim is a well-known Shariah scholar. He is a graduate of Jamia Darul Uloom, Karachi, where he obtained his Shahadat-ul-Aalamia (Masters in Arabic and Islamic Studies) and Takhassus Fil Iftaa' (Specialization in Islamic Jurisprudence and Fatwa) under the guidance of Justice Retd. Mufti Taqi Usmani. After completing his Takhassus, he earned a Postgraduate Diploma in Islamic Banking and Takaful from the Center for Islamic Economics (CIE), Karachi.

He also holds an MBA degree with majors in Banking and Finance from the Institute of Business Management (IoBM), Karachi and has earned the "Certified Shariah Advisor and Auditor (CSAA)" certification from the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), Bahrain.

He is registered as a Shariah Advisor with the Securities and Exchange Commission of Pakistan and prior to his appointment as Shariah Board Member, he has been associated with Faysal Bank Limited since 2022, where he initially worked as a Shariah Scholar, playing a key role in facilitating the bank’s Shariah compliance especially in corporate & investment banking transactions and bank-wide Shariah related trainings.

Since 2017, Mufti Uzair has been actively involved in Shariah advisory, Shariah compliance, issuing fatwas, as well as teaching and training in various institutions.

Shariah Certificate

Shariah Board Approval
for Deposit Products

Current account

Faysal Bank Limited, Barkat Islamic Banking’s Current accounts are based on the Shariah principles of “Qard”. It is a binding on Faysal Bank Limited, Barkat Islamic Banking to return a similar amount on demand for the current deposit and it guarantees such return even upon loss of the current account deposit.

Following current accounts are being offered:

Local Currency

Foreign Currency

Barkat Current Account

Barkat Current Account

Barkat Asaan Saving Account

Faysal Bank Limited, Barkat Islamic Banking’s non-current/remunerative deposit products (Saving accounts/investment certificates) are based on the Shariah principles of ‘Mudarabah’. Following are some basic rules of Shariah on which Faysal Bank Limited, Barkat Islamic Banking Mudarabah based deposit products are developed:

  • Under the Mudarabah mode, Faysal Bank Limited, Barkat Islamic Banking is the ‘Mudarib’ (manager of the funds) and the depositors are the ‘Rabb-ul-Maal” (owner of funds).
  • The Mudarib allocates the funds received from the Rabb-ul-Maal to deposit pool. These funds are provided to the customers who require financing under Islamic mode(s) of financing including but not limited to Murabaha, Istisna, Salam, Ijarah and Diminishing Musharakah.
  • These financing transactions and their agreements/documents are vetted and approved by the Shariah Board/Resident Shariah Board Member of Faysal Bank Limited.
  • The Mudarib calculates the profit of the deposit pool every month. Gross income of the deposit pool is shared between the Mudarib and Rabb-ul-Maal on the basis of pre-determined profit sharing ratio announced before the beginning of the month.
  • The Profit is distributed among the Rabb-ul-Maal of the pool on the basis of pre-determined weightages, announced before the beginning of the month based on their respective categories and tiers.
  • In case of loss, as per the rules of Mudarabah, the Rabb-ul-Maal of deposit pool shall bear the loss on the basis of their investment ratio.

On the basis of above rules and guidelines, following saving deposits products are being offered

Local Currency

Foreign Currency

Barkat Saving Account

Barkat Saving Account

Barkat Pensioner Saving Account

Barkat Islamic Investment Certificate

Barkat Asaan Saving Account

Barkat Muntazim Saving Account

Barkat Business Kamil Account

Barkat Senior Citizen Account

Barkat Paycheq Plus Saving Account

Barkat Margin Saving Account

Barkat Financial Institutions Deposit Account

Barkat Islamic Investment Certificate

Barkat Monthly Income Certificate

Barkat Institutional Investment Certificate

In our view, the above mentioned products are in accordance with the Shariah principles approved by Shariah Board of Faysal bank Limited.

And Allah knows the Best.

To view the Shahriah Certificate Click Here

Frequently Asked Questions (FAQ's)

Welcome to our FAQ

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:

  • Sale based e.g. Murabaha, Musawamah, Istisna, Salam & Tijarah
  • Investment based e.g. Musharahah (including Running Musharakah)
  • Lease e.g. Ijarah,
  • Sukuk (Islamic Bonds – issued or guaranteed by GoP as well as by private sector companies with a good credit rating), Etc

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…

  • Customers (Rabb ul Maal), provides their funds (deposit) to the Bank.
  • The Bank acts as the working partner (Mudarib) and invests these funds in its portfolio of Islamic Assets / Financing.
  • Gross Income is generated from these Islamic Assets / Financing, at every end of the month.
  • The Bank keeps its *Mudarib Share and distributes the remaining income as per *Weightages announced.

* 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.

  • Weightages are not Rate of returns percentages or amounts.
  • It is just an absolute number and will not signify anything until compared with other Weightages.
  • They are assigned to different categories of deposits in a pool, based on a set of parameters/criteria such as tenure, investment amount, profit payment frequency, etc.
  • These are used for distribution of profit among depositors and not necessarily a confirmation for guaranteed profit.
  • Customers get returns earned from relevant Islamic financing / assets and distributed according to the weightage assigned to their respective
  • Weightages are announced at least 3 working days before the beginning of period concerned and shall not be changed during the period.

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

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

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

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.

ISTISNAA

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.

BAI SALAM

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.

MUDARABAH

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

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.

For more information, please call our Contact Centre at 111 06 06 06 or visit your nearest Faysal Islamic Banking branch.
Islamic Banking – Disclosures

Promote transparency in Islamic banking.

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.

  • FBL IBD will maintain proper accounts and disclose the movement in PER in annual accounts as per AAOIFI accounting standards

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's CSR Initiatives

Transforming lives through meaningful actions.

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:

  • Work towards furtherance of medical care, establishment and/or assistance to medical clinics, providing healthcare to the handicapped, and creation of rehabilitation programs.
  • Assisting hospitals and institutions already engaged in such endeavours.
  • Assisting in education and skill development of deserving students both within and outside of Pakistan.
  • Providing relief to the poor by helping them educate their children and/or improving their earning levels.
  • Assisting in improving the environment by implementing ‘Go Green’ initiatives and supporting organizations involved in such activities.
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Our CSR Focus