HabibMetro Islamic BankingSaima

MarviAbu TalibUzair AhmadaniHusnain Kasbati - 5563

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Topics to Cover

• Introduction

• Mission & Vision• Board of Directors

• Shariah Advisor & Fatwa

• Islamic Products

• SWOT Analysis

• Conclusion

"We must work our destiny in our own way and present to theworld an economic system based on true Islamic concept of

equality of manhood and social justice."

Quaid-e-Azam Mohammad Ali JinnahFounder of Islamic Republic of Pakistan

On the Occasion of the Opening Ceremony of The State Bank of Pakistan on July 1, 1948

• HabibMetro was incorporated in Pakistan as a Public Listed Company in 1992 under the name, Metropolitan Bank Limited. The Bank commenced, duly licensed, full scheduled commercial-banking operations in October 1992.

• Metropolitan Bank, from October 1992 to September 2006, remained a highly rated bank and, vide it’s nationwide 51-branch on-line network, established as a distinguished provider of trade finance services.

• On October 26, 2006 Habib Bank A G Zurich`s Pakistan Operations merged into Metropolitan Bank Limited and the merged entity was named Habib Metropolitan Bank Limited. Demonstrating a strong commitment to Pakistan economy, HBZ is the principal shareholder of HABIBMETRO.

• HABIBMETRO Islamic was formally launched in Pakistan in March 2004 when the first Islamic Banking license was granted.

• HabibMetro opened its first Islamic banking branch in 2004.• At present, they provide Islamic banking services through 6 dedicated branches in Karachi, Lahore and

Islamabad, along with 198 desks located in the different branches across the country.

Introduction

Mission“Building on our legacy of trust, HABIBMETRO brings to you Shari’ah compliant banking solutions. Driven by our promise of service with security and strong ethical standards, we ensure that you remain close to your beliefs and stay ahead of the competition.”

Vision “Based on a foundation of trust, to be the most respected financial institution, delighting customers with excellence, enjoying the loyalty of a dedicated team, meeting the expectations of regulators and participating in social causes while providing superior returns to shareholders”

Mission & Vision

Board of DirectorsName Designation

Mr. Kassim Parekh Chairman

Mr. Sirajuddin Aziz President & CEO

Mr. Mohamed Ali R. Habib Executive Director

Mr. Ali S Habib Director

Mr. Muhammed Bashir Director

Mr. M. Hyder Habib Director

Mr. Sohail Hassan Director

Mr. Syed Zubair Ahmed Director

Mr. Tariq Ikram Director

Name Designation

Azam Zaidi Group Head Treasury

Abdul Aziz Memon Chief Risk officer

Fuzail Abbas Chief Financial officer

Khadim Nanji Head of Operations

Shahid kazi Head of Corporate Banking

Asad Ali Dhaamsey Head of Compliance

M. Shams Izhar Head of Risk Management

Waheed Usman Sakrani Head of HR & Training

Adnan Fasih Head of Islamic Banking Division

Key Management

Shariah Advisor The Shariah Advisors guide the development of banking products and services, certifies them and

assists compliance with Islamic Sharia. The Shariah auditors ensure that all the transactions are carried out in strict compliance to Islamic

principles of banking.

Mufti Abdul Sattar Laghari

Mufti Sahab has been providing Shariah Advisory services since 2005. He has previously worked as Shariah Advisor of one of the largest Bank of Pakistan and is part of NBFI

& Mudarabah Association of Pakistan. Mufti Abdul Sattar Leghari holds a certificate of 1 year correspondence course in Islamic Law from

Shariah Academy International Islamic University Islamabad Pakistan.

HABIBMETRO Fatwa Islamic Banking

HABIBMETRO Islamic Products

• HABIBMETRO ISLAMIC CURRENT ACCOUNT

• HABIBMETRO ISLAMIC SAVING ACCOUNT

• HABIBMETRO ISLAMIC INVESTMENT CERTIFICATES (HIIC)

• HABIBMETRO MURABAHA• HABIBMETRO IJARAH• HABIBMETRO Diminishing Musharakah

Islamic Current Account is opened on the basis of “Qard” (i.e. debt) whereby the customer is a lender and the Bank is the borrower.

Features Initial deposit required to open the account is Rs 1,000/-. The funds are payable to the customer on demand as and when required with neither any addition nor penalty. Joint account facility up to four joint account holders. No restrictions or limits on transactions. HABIBMETRO Islamic current account can also be opened in USD, Pound Sterling & Euro. No deduction of Zakat on the account.

Free Services Cheque Book(s) HABIBMETRO ATM / Debit Card Pay Order Statement of Account Webinfo & Teleinfo Services

HABIBMETRO ISLAMIC CURRENT ACCOUNT

HABIBMETRO ISLAMIC SAVING ACCOUNTSavings account opened on the basis of “Modarabah”, where the bank acts as “Modarib”(i.e Manager) and the Depositors are considered as “Rab-ul-Maal” (i.e. Depositor).

Features Initial deposit required to open the account is Rs 1,000/-. All deposits in PLS saving account shall be invested by the bank strictly in accordance with the Shari’ah compliant principles. Profit is shared between the PLS depositors and the Bank on the basis of predetermined profit sharing ratio. Depositors and the Bank will bear the same ratio of their respective investment in the event of loss. Six Monthly profit/loss payment on daily product basis. Profit rates are announced on monthly basis. HABIBMETRO Islamic savings account can also be opened in USD. Up to Rs. 1 million Free Takaful is also provided.

Free Services

Cheque Book(s) HABIBMETRO ATM / Debit Card Pay Order Statement of Account Webinfo & Teleinfo Services

HABIBMETRO ISLAMIC INVESTMENT CERTIFICATES (HIIC)The relation of the HIIC holder and the bank is Mudarib / Investor, the bank is Modarib (i.e Manager) and the depositors are Rab-ul-Maal (i.e Depositor).

Features

Minimum amount of investment is Rs.25,000/-.

All the principles and rules pertaining to HIIC are based strictly on the Islamic principle ofModarabah, Therefore, profits and losses are shared by the partners according to the rules of Islamic Shari’ah.

HIIC are available in tenures of 1, 3, 6 months & 1, 2, 3, & 5 years.

Monthly , Quarterly, Six Monthly profit payment is available for investment of 12 months and above.

Monthly profit credit to linked account automatically.

Profit is distributed as per predetermined weightages after deducting management fee.

HABIBMETRO Islamic Investment Certificates can also be obtained in USD.

HABIBMETRO Murabaha

Murabaha is a financing arrangement which is based on sales transaction where HABIBMETRO Islamic banking purchases the commodity and sells it after adding an agreed profit.

Murabaha involves the purchase of a commodity by HABIBMETRO Islamic banking on behalf of a customer and subsequent sale to the customer on cost-plus-profit basis.

The cost and profit margin to the bank is expressly disclosed to the customer.

Simply put, HABIBMETRO Islamic banking buys the commodity from a third party and sells it to the customer at an agreed price.

HABIBMETRO iJARAH

IJARAH is “to give something on rent. It is a Shariah compliant alternative to Conventional leasing where Bank acts as a Lessor and you act as a Lessee.

HABIBMETRO Islamic banking requires customers to pay a monthly rent for the use of the Vehicle.

In this while, the ownership of the vehicle remains with the Bank, only the rights of use is transferred to customer.

At the end of the Ijarah Agreement, customer will be given a choice whether to return the vehicle to the Bank and receive back the security deposit paid at the beginning or to purchase it at a price as low as the security deposit.

HABIBMETRO Diminishing Musharakah (DM)

Diminishing Musharakah is commonly used for the purpose of financing of fixed assets i.e. House Financing, Car Financing, Plant and Machinery Financing and all other fixed assets.

In Diminishing Musharakah the financer and the client participate either in joint ownership of a property or equipment or a commercial enterprise.

Diminishing Musharakah is basically joint ownership of the Bank and customer where customer as a lessee uses the share of the bank and pays the rentals, and as a partner redeems the share of the Bank. As and when the repayments are made by the customer the Bank share decreases to Zero gradually and customer’s share is increased proportionately to 100%.

Strengths

•Large Capital Base•Rank in top 10 banks of pakistan•Credit rating in Long-term “AA+” and “A1+” in short term.•Loyal and experienced human resource.•Loans are given only to known, reputable clients to avoid chances of fraud.•Strong customer relationship•Asset utilization is very good.

Opportunities

•Scope in Islamic banking•Low exposure to consumer banking providing opportunity to explore the segment•Should emphasize much on E-Banking•Opportunity to open branches in rural areas to gain more market share.•Opportunity to attract cross-border investors.

Threats

•Adverse impact of “Credit Crisis” May effect on HMB. •High reliability on one market segment only. i.e. (Textile 54%).•Competitors new products and innovation.•Inconsistency in government policies

Weaknesses

•Only valued clients are important•Bad portfolio diversification.•Old management – (no creativity)•Low consumer finance•Less job satisfaction of employees•Transaction/activity processing time is slow

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SWOT ANALYSIS OF HABIBMETRO

Conclusion "Verily Allah will never change the condition of a people until they change

themselves." :.(Surah ar-Ra'd Chapter 13, verse 11)

At present Islamic banking has a market share of over 7% of total banking sector of Pakistan.

Demand for Islamic banking products is increasing in all sectors consist of Individuals, SMEs & Corporate customer alike

SBP is playing a vital role in regulating and monitoring Islamic compliances.

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