final project of introduction

7/23/2019 Final Project of Introduction

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Table of Contents

Chapter 1..............................................................................................................................3

Introduction..........................................................................................................................3

Overview of Islamic Banking..............................................................................................3

Background of Islamic Banking......................................................................................3

Content offer by the Islamic banking..............................................................................4

ecent !istorical Background of Islamic Banking........................................................."

#tate level Islamic banking..............................................................................................$

Overview of Conventional Banking....................................................................................%

&odern Banking............................................................................................................1'

(evelopment of &odern Banking.................................................................................11

Banking in Indo)*akistan #ubcontinent........................................................................11

Banking in *akistan.......................................................................................................1+

Introduction of &ee,an Bank........................................................................................1"

+''3...........................................................................................................................1"

+''4...........................................................................................................................1-

+''$...........................................................................................................................1-

+''...........................................................................................................................1-

/ision.........................................................................................................................1$

Bur0 Islamic Bank of *akistan.......................................................................................1$

/ision.........................................................................................................................1

&ission......................................................................................................................1

BankIslami *akistan td................................................................................................1

+'11 *rogress eport of BankIslami.........................................................................1%


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/ision of BankIslamic...............................................................................................+'

&uslim Commercial Bank td 2&CB..........................................................................+'

Organi,ational ole in *akistan................................................................................+1

Organi,ation Overall *erformance in *akistan.........................................................+1

/ision.........................................................................................................................++

&ission......................................................................................................................++

ational Bank of *akistan.............................................................................................++

*roducts and #ervices of B*.......................................................................................+3

/ision.........................................................................................................................+4

&ission......................................................................................................................+4

Ob0ectives..................................................................................................................+4

Chapter 5wo.......................................................................................................................+-

I567586 6/I69...................................................................................................+-

*roblem #tatement.........................................................................................................3+

esearch Ob0ectives.......................................................................................................3+

&ethodology..................................................................................................................33

:inancial #tatements..................................................................................................34

;uestionnaire.............................................................................................................34

#ample #i,e...............................................................................................................34

&ethod of (ata collection and 7nalysis....................................................................34

:ield 6


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7ge.................................................................................................................................3$

Interpretation..............................................................................................................3$

#tatus..............................................................................................................................3

Interpretation..............................................................................................................3

;ualification..................................................................................................................3%

Interpretation..............................................................................................................3%

Income...........................................................................................................................4'

Interpretation..............................................................................................................4'

(o you have an account with bank?..............................................................................41

9hich type of account do you have?.............................................................................4+

Interpretation..............................................................................................................4+

In which bank you have an account?.............................................................................43

Interpretation..............................................................................................................43

9hy you prefer that particular 2above type of bank?...................................................44

Interpretation..............................................................................................................44

5ime period of dealing with banking sector..................................................................4"

Interpretation..............................................................................................................4"

If you have an account with a bank then in which form you are receiving your return?

.......................................................................................................................................4-

Interpretation..............................................................................................................4-

Interpretation..............................................................................................................4

(o you have knowledge about Islamic Banking?.........................................................4%

Interpretation..............................................................................................................4%

(o you know the difference between Islamic and conventional banking....................."'

Interpretation.............................................................................................................."'


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Islamic banks are working in the same manner as conventional banks are working...."1

Interpretation.............................................................................................................."1

Islamic banks are appropriately communing Islamic banking?...................................."+

Interpretation.............................................................................................................."+

Islamic banks are offering more services as compared to conventional banks............."3

Interpretation.............................................................................................................."3

5here is a proper network of Islamic banking as compared to conventional bank in

*akistan?........................................................................................................................"4

7pplication of Islamic banking system may lead *akistan to economic development.""

Interpretation..............................................................................................................""

#ervices of Islamic banks are more costly....................................................................."-

Interpretation.............................................................................................................."-

#ervices of commercial banks are more costly.............................................................."$

Interpretation.............................................................................................................."$

Islamic methods of finance are #hariah compliant........................................................"

Interpretation.............................................................................................................."

Islamic banks are maintaining Islamic environment in their offices............................."%

Interpretation.............................................................................................................."%

Islamic banking system can make the economy of *akistan interest free.....................-'

In future Islamic banking sector will be the most successful business of *akistan

because of its #hariah compliance.................................................................................-1

Interpretation..............................................................................................................-1

Conventional banks provide more loan facilities as compare to Islamic banks............-+

Interpretation..............................................................................................................-+

Conventional banks give more return than Islamic banks.............................................-3


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Interpretation..............................................................................................................-3

>rowth rate of conventional banking is more than Islamic banking in *akistan..........-4

Interpretation..............................................................................................................-4

esults and (iscussion..................................................................................................-"

1. &ee,an bank...........................................................................................................--

7ssets >rowth of &ee,an Bank................................................................................--

Interpretation..............................................................................................................--

(eposits >rowth of &ee,an Bank.............................................................................-$

Interpretation..............................................................................................................-$

Comparison of 5otal 7ssets@ (eposits and :inancing of &ee,an Bank....................-

Interpretation..............................................................................................................-

+. BankIslamiA.............................................................................................................-%

7ssets >rowth of BankIslami....................................................................................-%

Interpretation..............................................................................................................-%

(eposits >rowth of BankIslami................................................................................$'

Interpretation..............................................................................................................$'

Comparison of 5otal 7ssets@ (eposits and :inancing of BankIslami........................$1

Interpretation..............................................................................................................$1

3. Bur0 BankA..................................................................................................................$+

7ssets >rowth of Bur0 Bank..........................................................................................$+

Interpretation..............................................................................................................$+

(eposits >rowth of Bur0 Bank..................................................................................$3

Interpretation..............................................................................................................$3

Comparison of 5otal 7ssets@ (eposits and :inancing of Bur0 Bank.........................$4


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Interpretation..............................................................................................................$4

(eposits >rowth of national bank.............................................................................$-

Interpretation..............................................................................................................$-

Interpretation..............................................................................................................$$

4. ational BankA...........................................................................................................$

7ssets >rowth of national Bank................................................................................$

Interpretation..............................................................................................................$

". &uslim commercial BankA........................................................................................$%

7ssets >rowth of muslim commercial Bank.............................................................$%

Interpretation..............................................................................................................$%

Comparison of 5otal 7ssets@ (eposits and :inancing of muslim commercial Bank.'

Interpretation..............................................................................................................'

Comparison of 5otal 7ssets@ (eposits and :inancing of national Bank....................1

Interpretation..............................................................................................................1

Chapter 3............................................................................................................................+

Conclusion.........................................................................................................................+


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Abstract

5he ma0or part of this learning to calculated the growth and performance of

Islamic banking and conventional banking in *akistan with respect to growth of 7ssets

and (eposits 5he growth rate of Islamic banking of *akistan is more than conventional

bank. 5o complete this research which was the sample of five banks and the sample

consist of two conventional and three Islamic banks that include ational bank of

*akistan 2B*@ &uslim commercial bank 2&CB@ Bur0 bank imited@ BankIslami

imited@ &ee,an Bank imited. 5o conclude this research we suggested two variables

which are growth in assets and growth in deposits. :or this purpose to check the growth

in assets and deposits we used secondary data that is obtained from the financial

statements of these related banks. 5he total assets of ational bank are on the track of

growth@ followed by assets and deposits. 9e can see that their assets were around +

million in +'' and since +'1+ they were increased to around 13 million rupees@ deposits

were around -+ million and till the last year they were around 1' million so the ational

bank growth of financing is also low but significant. 5he above table and diagram shows

the 5otal assets of ational bank from the year +''$)+'1+. It is evident from the above

table that the growth of ational banks assets started with $.+ but it is fluctuated with a

high of 1".$1 in +'')+''% and low of %.-% in +''%)+'1'@ before ending at 13.%"

in last year 2+'1+. It can be concluded from this research study that the growth ofational banks assets is significant rather it has fluctuations. It can be concluded from

this research study that the growth of &uslim Commercial banks assets is significant

rather it has fluctuations. 5he growth of assets and deposits of Islamic banks is more than

conventional banks. 5he second techni=ue used in this research was =uestionnaire.

7ccording to the =uestionnaire result the Islamic bank got more positive responses as

compared to conventional bank. 9e applied #*## on the =uestionnaire which results are

attached.


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CHAPTER 1

Introduction

Overview of Islamic Banking

5here is no doubt that overview of Islamic banking is very attractive. #ince the

medieval era 21''')1"'' 7(@ in &iddle 6ast traders and businessmen were busy in

economic transactions. 7t that time in these dealings the same economic rules were used

as by the 6uropeans.

5he Islamic finance has absorbed worldly with a physically and passion. 7lmost

-' countries interest has proliferated@ going future than Islamic world to lead the global

finance center. #o this is better way to Islamic banking to improve the Islamic banking in

overall country especially &uslim country. 6ach day@ Islamic banking achieves the new

boundaries. #ingapore leads the Islamic banking. 9hereas the world now understands the

meaning of Islamic finance industry@ in *akistan@ &r. &uhammad 7li Dinnah observes the

=uality of Islamic principle in 1%4. 7nd in his address or appointed the state bank of

*akistan 2#B*.

I shall observe with intensity of your organi,ation developing the banking

practices compatible with social life economic life and Islamic ideas. Our responsibility

to work and density present the world true Islamic concept and economic system and

social 0ustice. *akistan has a e


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9hen the center 6ast E 7sian countries become more significant trading

associates for several 6uropean companies@ they open banks inside these countries@

ma0ority of the banks were base on interest bearing financial system. 9hen trading

relationships with 6uropeans continued to grow@ such financial institutions also started

their business outside the 6urope. !owever@ even when local traders and business owners

used these institutions@ they 0ust only transferred their money from one account to other.

5he depositing and borrowing money was very limited because the local population was

not interested in taking or getting interest which was involved in these transactions.

:urthermore@ several supportive institutions which were base on the true principal of

profit and loss sharing model were also available@ but they were situated in positive

locations.

7s monetary demands improved@ it was not possible for home traders and

industry people to avoid from banking institutions that were based on interest. &ore@ such

banks were eovernments have to apply these types of banks toward cope the need of time as it was

the only choice for them@ some e


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Recent Historical Background of Islamic Banking

5hroughout the 1th@ 1% thand the initial half of the +' thcentury appro


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&any &uslim economists and #hariah #cholars tried hard subse=uently that till

the finish of 1%-'s various type of a sketch of Islamic banking may be obtainable. 5his

effort is also done by the Bankers and businessmen so that they could be succeeded to

make a model of Islamic banking which is totally applicable and practical. Conditions of

7rab countries political structure were not good for any several programs at the situation

level. But such several programs can be made in the private sector.

5he initial speculative model was base going on two)tier &udaraba@ in which

profit distribution had replaced interest in deposits and borrowing. Islamic banks should

be monetary intermediaries@ 0ust like the conservative banks@ they will abolish the interest

of the all their operations@ they would only rely on partnership and profit and loss sharing

concept. 5hey were allowed to operate re=uire deposits like conservative banks and

competitors and offer services beside fees@ appro


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5he free 6nterprise e


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Iran stated interest free of charge banking throw presenting usury without charge laws

during 1%3. 6veryone the Iranian bank was public. 7ccording to instruct of Islamic rule

followed in Iran@ the will be paid to the depositors on their deposits if their deposits are

not loyal in progress. In home and outside trade the financing is complete on the basis of

mark up@ but distribution modes participate a ma0or position in financing farming and

industry. Interests without charge loans are obtainable for the reduced to meet such

re=uirements as accommodation etc.

#udan take initiative relating to Islamic banking in 1%4 later whole financial

sector covered in it up to 1%%. In industry and agriculture sector sharing modes of

finance is used and the government has planned to sale sharing based certificates to

general public funds collected through such procedure will be used in growth pro0ect. But

the reduced economic conditions are the main hurdle in this procedure. But the current

incident of oils as rising source of community revenue is possible to make a

differentiation.

&alaysias initial formally sponsored of Islamic bank established in 1%3. :urther

banks available in the country also offer Islamic products and services. 5he overall

supervision is done by the countrys essential bank bank egara &alaysia@ which have a

panel of #hariah scholars recommend it. &alaysian Islamic economic structure allows

sale of liability instruments based scheduled receivables from auction of actual

merchandise and services and individuals based in rental. 5he supervision issues bonds

and redeemed at par but moving coupons allow economic benefits that differ. In

&alaysia@ a dynamic Islamic capital market is available and which asset base securities

are traded.

Indonesias bank &uamlat@ recogni,ed in 1%%4 under situation deference@ and

there are 4'' branches of it in whole of the country. Its economic operations pursue the

&alaysian model. 5hey are only other minor Islamic banks.

5urkey does not adopt or implemented Islamic banking on the status level@

although some Islamic banks were established under particular license in behind 's.

5hey are silent performance@ along with additional non)Islamic banks or conventional

banks.


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Islamic banking has fast growth in many countries both number and si,e around

the world like 26rrico in +''+. 7lthough the Islamic banks total assets very small

compare internationally entire worlds banking assets. 5he rate of growth is e


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confidence of these private banks and work individuals without uncertainty. 7fter

omans the bank of /enice was introduce 11"$ 7.( and the bank follow some standing

banks 133- M 134% different cities in Italy. 5he fact of &odern Banking is the14 thcentury

in Barcelona. In 14'1 >erman was formed the public bank. 5he bank perform operation@

discounting and in 14'$ also formed new public banks by 1- thcentury !amburg and

uremberg.

uremberg from 1"4 M 1""1 banks needed the commercial interest growth of

the activities of transfer. But it is not successful and 1"" establish the state bank name

Banco (i ialto in the >enoa. 7nd also 1-'% formed 7msterdam bank improve the state

bank and till performs 1$%". 1-%' the bank !umbury and perform great services of goods

in the countries and this bank deal with until 1$3 and the !umbury bank was merged

with eich bank.

"odern Banking

5he Britain ombardy merchants in 14 thcentury came into the 6ngland. 7nd

settled in ondon city and now this is ondon #treet. 5he ombardy develops the

banking document credits and also trade and product of landing. 5he British king !enry

III compulsory issue the order to increase the interest rate charge 43 per annum. 5heyearn more money and establish the money e


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+evelo,ment of "odern Banking

In 1"4 opened the 0oint stock companies act corporations and 1"" striated

shareholder liabilities of the limited company. #o in 1%1 came 11 thbank perform today.

5he efforts of the 6ngland development banks to introduced the strong banking system in

the entire world. In 1%4- the labor government of 6ngland nationali,ed the 6ngland

bank. In 1%"" British banks perform the conventional banking through hire purchase

finance undertaking the companies. 8sing the hire purchase@ purchase industry e=uipment

plant and machinery and given the industry these machineries on high interest rates.

(ifferent modern banks like commercial banks introduce consumer banks saving banks

and also investments banks 6C5.

Banking in Indo(Pakistan $ubcontinent

5he Indian society was reasonable well)known banking correct from very start.

Indian society money is medium e


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Doint stock banks

Bank of imperial

5he bank of reserve India

Banking in Pakistan

5ime of independence@ *akistan only were producing raw material or

agriculture indo)*akistan subcontinent and only 4$ scheduled bank offices in *akistan.

7ct of 1%4$ study and find out the issue of banking in *akistan. 5he committee found

that the reserve bank of India perform the role in *akistan 3' th#eptember 1%4@ so that is

the problem find to the demand liability which is not settled in *akistan and India. #o

*akistan plan and announced in Dune 1%4$. *akistan transfer assets in India. 7fter 3'

0une1%4 the number scheduled banks offices in *akistan decrease from 4$ only 1%"remain after separation. eserve bank of India closes the offices in *akistan. But the

suppression of Indian government share $" corer pay cash at the time of suppression.

>overnment of *akistan establish the state bank of *akistan Duly I@ 1%4. ;uaid)6)7,am

&uhammad 7li Dinnah was first director of the #tate Bank of *akistan and 5he :ather of

ation.

&ay 1+@ 1%4 the 2#B* control the complete banking system and control

money in *akistan. 5he primary important duty of 2#B* issues the currency note which

is difficult to *akistan because India reserve bank issue the notes. In October 1%4

*akistan issue first currency notes "@1' and 1'' rupees and state bank of *akistan

establish another bank to control the *akistan system branches so the 2#B* establish the

national bank of *akistan in 1%4% and in 1%"+ the national bank of *akistan perform

strong agency function. 1%4% control the strong banking institution and companies

system in *akistan and also open the new branches foreign banks. *reparation the

banking sector and trained man power. 1%"' Gorean 9ar offer huge boom *akistan

e


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and provide industry commerce and trade credit facilities . 1%$+ economic crisis the

demoneti,ation currency of *akistan and create difficulty in *akistan banking so the

Fulfi=ar Bhutto in 1%$3 nationali,ed the banks. #o Danuary 1%%1 pass the law

disinvestment nationali,ed and privati,ation commercial banks. Open more than 4'''

branches to give the mobili,ed e


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It is well)known that the corporate banking commercial retail banking

regularly and treasury and investment usually as front workplace while the banking hold

up is performing backside office functions 2Chin@ 7pril +'1'

Current

7ccount

Branch

Operation

:oreign

6


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Introduction of "ee'an Bank

&ee,an bank listed in G#6 and also public listed company in *akistan and first

incorporated bank on Danuary +$@ 1%%$. It started the working as a first Islamic bank in

*akistan the year was same august@ 1%%$. 7nd &ee,an bank cleared by the listed of Jstate

bank of *akistanK to start working as Islamic commercial bank in *akistan Danuary 31@

+''+@ 2#B* establish. 5he first nations complete commercial banking like 2&B. It was

introduce innovative era in Islamic banking record in *akistan with the aim of 2&Btd.

the bank follow the rules and regulations of the Islamic #arah and no compromise the

rules and regulation of Islamic shariah and it is introduce first time in *akistan complete

and true Islamic bank.

5he &ee,an bank controls 1-- branches in 4' cities of *akistan appro


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using the guidelines of ;uran and !ades. *akistan governments award the mandates of

Islamic bank for international sukuk 2Bound offer to the 8#( "'' million. &B td is the

shariah compliance structuring consultant for the elobal Islamic 6mirates bank. In +''$ the &ee,an bank

working 1'' branches in *akistan.

/004

5he total 1-- branches working and plus 3" sub)branches working more than

41 cities in the *akistan. &ee,an bank now totally led the Islamic banking in the nation.

Create the structure of &ee,an bank latest head office in Garachi. In (ecember +''@

5otal nearest 1" million financing and investment collection of local banks. 7nd 13$.-

billion compared in (ecember +''$. #hare of the Islamic banking increase " during

+''. 5he Islamic banking whole assets reached s.+$1.1 billion (ec@ +'' and +''$

assets only s.+'" billion. #o the Islamic banking assets increase s.--.1 billion in

(ecember +''. 5his is better achievement and success to increase to potential of Islamic

banking in *akistan.

&ee,an bank establishes Jshariah supervisory boardK =ualified and high

Islamic scholars working in this board. 5he shariah supervisory boards check the

activities of Islamic bank and new products approved in Islamic banking. (r & Imran

8smani checks the every transaction of banks.

5ision

#et up Islamic banking as banking of original selection to make possible the

accomplishment of a fair financial structure@ provided that a physically powerful base for

establish a transparent and 0ust the social order for mankind.

"ission


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Become a first Islamic bank@ present a one)stop store for pioneering

value)added goods and facilitate to our consumers inside the limits of #hariah@ although

optimi,ing the stakeholders assessment during an e


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(evotion

5he above points are the main vision of the Bur0 Islamic banking. 5he bur0 bank has

work 7ccording to the shariah principal. 5hey are necessary to follow it otherwise they

do not work. 7nd shariah board check and balance of every Islamic bank and they are

introduced the many method for continue the Islamic bank. 7ll Islamic bank follow these

principal that are introduced the shariah scholar.

BankIslami Pakistan 6td

BankIslami imited@ the second complete profitable bank in *akistan. BankIslami

was established in *akistan October 1@ +''4. 5he purpose of bank to focused the main

wealth of management as the center region in *akistan business. 7nd also include the

shariah compliant wholesale banking products@ incorporated financial arrangement

services@ products of third party and proprietary services in shariah complaints products

available in BankIslamic.

5he bank main purpose to establish the intense full)fledge countrywide network

and end of the +'' year@ total 1'+ branches network working in 4% cities of *akistan.

5he BankIslamic is the fastest growing network banking history in *akistan network in

addition to offer the widest system of any Islamic bank in *akistan@ bank Islamic growing

fastely in the Islamic countries.

BankIslami provide the facilities to our customers like Jvisa (ebit Islamic cardK

globally accepted with outstanding features. 7nd also provide

75& cash facilities

Coverage of accidental takaful

&obile alerts #

7ccepted +$ million business outlets global

7ccepted more than 4"'' 75&s countrywide


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5he BankIslamic also brings the J&8#G8 !ome :inancingK to fulfill your dreams

homes follow the Islamic shariah ways. 5he &uskun home finance include the must be

verify the shariah board and the finance limited only s.1' million the term of payment

only +' year and only first year charge the down payment follow the shariah guiding

principle and most important in BankIslamic provide the fast processing to the customer

of BankIslami.

Islamic 7uto I0arah is the s=uarest way to fulfill your car dream.

o monthly payment till delivery

*rovide the 5akaful treatment services

*eriod of payment 3 to " year

7vailable every kind of car like new@ use@ and important

#mallest amount securities deposits

/011 Progress Re,ort of BankIslami

5otal deposits of BankIslamic s. "'."- million total 3+ of total deposits

7ssets of BankIslamic s. ".+' million total 3' assets

BankIslamic total :inancing is s.+'.111 million of +1 financing

BankIslamic total Investment is s. +1.'- million. "3 of total investment

5otal employees count 144$.employees $ in bank Islamic

+'11 is the best performance year of the BankIslami follows the shariah complaints

rules and regulations. BankIslami bank is normally known has the dawood Islamic bank

limited. 5he bank received the permit from the state bank of *akistan 2#B* from &ay

+''- and official starting the operation 7pril +$@ +''$.

5ision of BankIslamic

5he (ream of Islamic Banking to be #tandard as leading and reliable Islamic

Bank.

"ission of BankIslamic

:aithfulness


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Innovative

5houghtful our client desires

Commitment to fineness and

:ast progress of delivery solution as a growing institution

5he mission of BankIslamic provide these things and also worth of stakeholders by

contribution authentic@ shariah compliant and advance goods and services.

2Bankislamic Introduction@ &arch $@ +'1+

"uslim Commercial Bank 6td 7"CB8

&CB Bank imited have a hard groundwork of "' years in *akistan@ and 1'''

network branches in *akistan@ "' 7utomated Branches and also 3"' 75&s in 4' cities

countrywide 1+ banks on &CB 75& &65 control in 4' cities of *akistan.

&CB operations sustained focus on good reason and smooth productivity increase in

dispensation customer services and customer standards to provide the customer and also

bank introduce the better concept@ innovative ideas to trade services to improve the

=uality and efficiency of the bank and reduce the cost of banking with concern banking

e


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6specially this bank was established to provide the better banking services and

opportunity to south 7sian business community persons. But during the Fulfi=ar 7li

Bhutto >overnment all banks nationali,ed with &CB Bank in 1%$4. But the first bank

was privati,ed in 1%%1 ame &CB Bank. 5his was purchased ishat >roup.

&CB asset base fourth biggest bank in *akistan total asset of &CB is 8#H-. billion@ and

also large market in *akistan like capital market is 8#H 4'1 billion. 7ppro


27/86

consumers. In responsibility so@ we guarantee that our shareholders can put in with

confidence in us.

9ational Bank of Pakistan

B* was start on ovember @ 1%4% during transitory of a uni=ue ordinance in

the *akistan parliament 7ssembly. 5he country need to bank working in the bank because

*akistan 0ust now born country was in front of economics crises. #o *akistan establishes

the central bank of *akistan on Duly 1%4.

Central bank of *akistan formed the ational bank of *akistan according to the

companys ordinance 1%4% and scheduled all *akistan stock e


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5oday the national bank performance is increased and efficient customer satisfaction

institution. It has urbani,ed wide range of manufactured goods and creates the diverse

segments of society. But B* design some handsome scheme low and middle income

persons who is not afford some products.B* scheme includes the B* gold and cash@

B* gives the 7dvance salary@ B* agriculture (ost@ etc. and also particular recognition

;ar,)e)!asna loan #cheme to the students. 7nother scheme like 0obless scheme@

transport public scheme@ employment scheme@ introduce and establish the 2B*.

2Introduction of ational Bank of *akistan@ ovember @+''$

Business volume of 9BP

(esignation 5otal 6mployees

6


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discharge our liability as a batter business resident of *akistan and in country wherever

we operates

Ob#ectives

5he aim of our study is to analy,e and evaluate the performance of new

Islamic commercial banks with same si,e of the conventional banks organi,e to sketch

the conclusion to the new Islamic banking can work in a competitive benefit and get

together the growth of their depositors. 5he reason of the learning to discover the

development of Islamic and conventional banking in *akistan. 9e have compare the

7ssets

(eposits

financing

7nd branches network in both Islamic and conventional banking in *akistan.

we find out the people knowledge and feelings about Islamic and conventional banking

through Islamic banking and conventional banking history and different banks

introduction find and analysis the performance of the branches of Islamic and

conventional banking which one is better performance in *akistan and customer is satisfy

the Islamic banking and conventional banking whether they know the difference bPw

conventional and Islamic banking in *akistan


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CHAPTER T.O

6ITERAT%RE RE5IE.

"iss $amraI


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banking in interest free@ lack of e


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administration and operations as outer factors are participant and financial system 2!abib@

+''%. 5he economic and essentially made a force on together Islamic E Conventional

banking. Islamic banking fi


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Islamic Banking. &ee,an bank is *akistans first bank providing complete Islamic

banking. 5hen other banks like &CB@ :aysal Bank and B* etc are also concentrating in

this field. 5his market has a huge potential in *akistan as well as in other Islamic

countries.

5he second ma0or area is consumer financing. &any small banks are

concentrating on consumer financing but the ma0or banks especially B* is neglecting

this opportunity. #ince B* has a huge amount of deposits@ so it should also look for

opportunities in this area.

In addition to the opportunities@ there are many problems in *akistans banking

industry. 5he bankers do not have sufficient knowledge of risk management. 5here was

no concept of risk management in the recent past. But now many ma0or banks have their

own risk management units and the small banks are hiring professionals to provide them

with the security of risk management techni=ues. 7lso the implementation of 5;& is still

missing in the industry. 5here is an abrupt need of institutionali,ing 5otal ;uality

&anagement tools and techni=ues to strengthen the industry.

In the end@ the writer has given a list of areas which still need improvements like

the audit and compliance area@ implementation of anti)money laundering practices and

creation of complaint cells etc.

5his paper is the research conducted to assess the changes that took place in the

*akistani banking industry as a result of this reformation and deregulation. 5he researcher

talks about the effects on productivity@ profitability@ revenue and cost generation and

efficiency of the banks. 7lso the effects on interest rates are observed. 5he researchers

have also taken into account the competitive location of the banks af ter the improvement

and privati,ation.

7fter analy,ing the outcome@ the researchers are of the view that this step of

reformation increased both revenues and cost of the industry. 5his shows that the

borrowers and the lenders are both given e=ual benefits from the step. 5he overall

profitability of the industry remains almost the same. 5he efficiency of the industry also

showed negative trend because usually in the privati,ed environment@ the ma0or banks


34/86


35/86

+'1'. In +''3 the assets of Islamic banks were 13 billion now they have increased to 4$-

billion and divide of Islamic banking in value of assets is '.-@ which at this time better

to -. in +'1'. It has been concluded that performance of Islamic banking is

outstanding. >rowth of Islamic banking has a great increasing trend. (ue to strong

commitments of #B* towards Islamic banking they are on the track of rapid growth.

5hey have strong competition with conventional banks which creates competition and is

a great challenge for Islamic banking.7Hafsa and muna''a: ma /01/8

Islamic banking is a current incident as compare to the conventional banking

which operates and used for additional century. Islamic banking operates the threat

distribution concept as a substitute of iba and interest in conventional banking. Islamic

banks appropriate to its ma0or development is assets entire the globe have proved their

survival in on &uslim countries and also opening Islamic branchesPwindows to provide

the rising demand for its foodstuffs and services. 7Olson > ?oubi: /0048

5he conventional bank 2CB s differs in speculation and observes from Islamic

Bank 2IB. 5he ma0ority of differences can be summari,ed by stating that 5Bs

organi,ation is a debt)based and it allows for threat remove. 9hile IBs organi,ation is

asset)based and it is allow for risk distribution 2!asan E (ridi@ +''-.

5he learning of &alaysian banking customers create that a high stage of knowledge

about Islamic banking but lack of information of Islamic banking goods and products@

including lack of consideration of the differentiation among Islamic and conventional

banking. &ostly *eople know the conventional banking products and services and they

used these products against long@ short and medium term loans and deposits. 5hey also

believed that improved customer education will support in making people further

attentive of Islamic banking products.Hamid and 9ordin: /0018

7Barat!a: Arunagiri > Ravindran: /0118 Conducted a study on consumer

preferences of the products and services of Islamic banking to investigate the reasons that

why consumers prefer products and services of Islamic banking as compare to

conventional banking. But in past mostly people preferred conventional banking products

and services in their research they found that three variables awareness@ =uality and

profitability influence consumers to prefer Islamic banking. ;uality and profitability have


36/86

higher degree of influence on consumers regarding Islamic banking. 5hey also said that

Islamic banks should improve their =uality and profitability. 5hey should take steps to

create awareness among the consumers regarding Islamic banking products and services

79aveed > @as!if(ur(Re!amn: /0108 5hey conducted a study in *akistan in order to

get information about the Islamic banking customers@ their usage and their awareness

regarding Islamic banking products and services. 5heir research findings e


37/86

Researc! Ob#ectives

5he ob0ectives of this study are divided into two parts

1. 9hat is the development of Islamic banking?

5he ma0or part of this learning to calculated the growth and performance of

Islamic banking and conventional banking in *akistan with respect to growth of

i 7ssetsii (eposits

+. 9hat is the peoples attitude and knowledge about Islamic banking and

conventional banking?

5he other ob0ective of this study is the evaluation that do people have

knowledge of Islamic banking and conventional banking@ whether they know the

difference between Islamic banking and conventional banking or not and also to

study their attitude regarding their working pattern@ its compliance with #hariah@

its network@ services and their future prospect in *akistan.

"et!odolog

In order to calculate the growth of Islamic banking I am intended to take

=uantitative data available on the sites of Islamic banks and conventional banks. :or this

purpose three Islamic banks 2&ee,an Bank@ BankIslami and Bur0 Bank and two

conventional banks 2&uslim commercial Bank@ ational Bank of *akistan have been

selected.

5o investigate the customer attitude and knowledge a =uestionnaire has been

designed to collect =ualitative data. #*## and 6


38/86


39/86

&uestionnaire

5he final draft of =uestionnaire consists of +4 =uestions e


40/86


41/86

Inter,retation

In this =uestion different age of people did participate. 5here were 1+ people

who were less than +' of age. 5here were -4 people who were less than +1)3' of age.5here were +4 people who were less than 31)4' of age

/alid :re=uency *ercent /alid *ercent Cumulative *ercent

ess than +' - 1+.' 1+.' 1+.'

+1)3' 3+ -4.' -4.' $-.'

31)4' 1+ +4.' +4.' 1''.'

5otal "' 1''.' 1''.'


42/86

$tatus


#ingle ++ 44.' 44.' 44.'

&arried + "-.' "-.' 1''.'

5otal "' 1''.' 1''.'

.

Inter,retation

In this =uestion different status of people did participate. 5here were 44 people

who were single. 5here were "- people who were married


43/86

&ualification


Intermediate +4 4.' 4.' 4.'

Bachelor 13 +-.' +-.' $4.'

&aster - 1+.' 1+.' -.'

Other $ 14.' 14.' 1''.'

5otal "' 1''.' 1''.'

.

Inter,retation

In this =uestion different =ualification of people did participate. 5here were 4

people who were intermediate. 5here were +- people who were bachelor degree holder.

5here were 1+ people who were master degree holder. 5here were 14 people who

were other degree holders like 7CC7 or C


44/86

Income


1'''' or below 1 +.' +.' +.'

1'''')4'''' +% ".' ".' -'.'

4'''1)$'''' 1" 3'.' 3'.' %'.'

$'''1)1''@''' " 1'.' 1'.' 1''.'

5otal "' 1''.' 1''.'

Inter,retation

In this =uestion different income of people did participate. 5here were + people

whose income was J1'@''' or belowK. 5here were " people whose income was

J1'@''')4'@'''K. 5here were 3' people whose income was 4'''1)$''''. 5here were

1' people whose income was $'''1)1''@'''.


45/86

+o ou !ave an account wit! bankF


Qes "' 1''.' 1''.' 1''.'

Inter,retation

In this =uestion all people had banks account


46/86

.!ic! t,e of account do ou !aveF


:i


47/86


48/86


49/86

Time ,eriod of dealing wit! banking sector


ess than 1 year " 1'.' 1'.' 1'.'

1)" 3" $'.' $'.' '.'

-)1' $ 14.' 14.' %4.'

11)1" 3 -.' -.' 1''.'

5otal "' 1''.' 1''.'

Inter,retation

In this =uestion there were 1' people who have less than 1 year of e


50/86


51/86


52/86


53/86

+o ou !ave knowledge about Islamic BankingF


Qes 3" $'.' $'.' $'.'

o 1" 3'.' 3'.' 1''.'

5otal "' 1''.' 1''.'

Inter,retation

In this =uestion there were $' people who had Islam banking knowledge. 5here

were 3' people who not had Islam banking knowledge


54/86

+o ou know t!e difference between Islamic and conventional

banking


Qes 3+ -4.' -4.' -4.'

o 1" 3'.' 3'.' %4.'

eutral 3 -.' -.' 1''.'

5otal "' 1''.' 1''.'

Inter,retation

In this =uestion there were -4 people who know about Islamic and conventional

banking. 5here were 3' people who dont know about Islamic and conventional

banking. 5here were - people who neutral about Islamic and conventional banking.


55/86

Islamic banks are working in t!e same manner as

conventional banks are working


Qes 3$ $4.' $4.' $4.'

o 13 +-.' +-.' 1''.'

5otal "' 1''.' 1''.'

Inter,retation

In this =uestion there were $4 people who think Islamic and conventional

banking are same. 5here were +- people who think Islamic and conventional banking

are not same.


56/86

Islamic banks are a,,ro,riatel communing Islamic bankingF


#trongly 7gree 3 -.' -.' -.'

7gree 1" 3'.' 3'.' 3-.'

(isagree 31 -+.' -+.' %.'

#trongly (isagree 1 +.' +.' 1''.'

5otal "' 1''.' 1''.'

Inter,retation

In this =uestion there were - people who ticks strongly agree. 5here were 3'

people who ticks agree. 5here were -+ people who ticks disagree and there were +

people who ticks strongly disagree


57/86

Islamic banks are offering more services as com,ared to

conventional banks


#trongly 7gree 3 -.' -.' -.'

7gree 1" 3'.' 3'.' 3-.'

(isagree 31 -+.' -+.' %.'

#trongly (isagree 1 +.' +.' 1''.'

5otal "' 1''.' 1''.'

Inter,retation

In this =uestion there were - people who ticks strongly agree. 5here were 3'

people who ticks agree. 5here were -+ people who ticks disagree and there were +



58/86

T!ere is a ,ro,er network of Islamic banking as com,ared to

conventional bank in PakistanF


#trongly 7gree 3- $+.' $+.' $+.'

7gree 14 +.' +.' 1''.'

5otal "' 1''.' 1''.'

Inter,retation

In this =uestion there were $+ people who ticks strongly agree. 5here were +

people who ticks agree.


59/86


60/86

$ervices of Islamic banks are more costl


#trongly 7gree 1-.' 1-.' 1-.'

7gree +- "+.' "+.' -.'

(isagree 1-.' 1-.' 4.'

#trongly (isagree 1-.' 1-.' 1''.'

5otal "' 1''.' 1''.'

Inter,retation

In this =uestion there were 1- people who ticks strongly agree. 5here were "+

people who ticks agree. 5here were 1- people who ticks disagree and there were 1-



61/86

$ervices of commercial banks are more costl


#trongly 7gree 1-.' 1-.' 1-.'

7gree - 1+.' 1+.' +.'

(isagree + "-.' "-.' 4.'

#trongly (isagree 1-.' 1-.' 1''.'

5otal "' 1''.' 1''.'

Inter,retation

In this =uestion there were 1- people who ticks strongly agree. 5here were 1+

people who ticks agree. 5here were "- people who ticks disagree and there were 1-



62/86


63/86


64/86

Islamic banking sstem can make t!e econom of Pakistan interest

free


#trongly 7gree 1" 3'.' 3'.' 3'.'

7gree 4 .' .' 3.'

(isagree 13 +-.' +-.' -4.'

#trongly (isagree 1 3-.' 3-.' 1''.'

5otal "' 1''.' 1''.'

Inter,retation

In this =uestion there were 3' people who ticks strongly agree. 5here were

people who ticks agree. 5here were +- people who ticks disagree and there were 3-

people who ticks strongly disagree.


65/86

In future Islamic banking sector will be t!e most successful

business of Pakistan because of its $!aria! com,liance


Qes +3 4-.' 4-.' 4-.'

o +- "+.' "+.' %.'

eutral 1 +.' +.' 1''.'

5otal "' 1''.' 1''.'

Inter,retation

In this =uestion there were 4- people who tick yes. 5here were "+ people who

ticks o. 5here were + people who ticks disagree and there were 3- people who ticks

strongly disagree


66/86

Conventional banks ,rovide more loan facilities as com,are

to Islamic banks


Qes 3- $+.' $+.' $+.'

o 14 +.' +.' 1''.'

5otal "' 1''.' 1''.'

Inter,retation

In this =uestion there were $+ people who ticks Qes. 5here were + people

who ticks o.


67/86

Conventional banks give more return t!an Islamic banks


Qes 4' '.' '.' '.'

o 1' +'.' +'.' 1''.'

5otal "' 1''.' 1''.'

Inter,retation

In this =uestion there were ' people who ticks Qes. 5here were +' people

who ticks o.


68/86


69/86

5he trade of Islamic banking continued its development throughout the last five years

regardless of diversify confronts the nation have been face. (evelopment of the Islamic

banks should be measured during a variety of factors. 7long with these factors@ there

include figure of branches@ enlarge in entire assets@ amount of deposits@ amount of

investment and number of employees.

5he growth of Islamic banking has been calculated on the basis of individual bank

performance by taking a sample of 3 full)fledged Islamic banks and + conventional

banks.

1 "ee'an Bank

/ Bur# Bank

BankIslami Pakistan

2 "uslim commercial bank

G 9ational bank of Pakistan5he growth of these banks has been calculated for the period of five years to get a

clear understanding of their position in banking industry.

5he following formula has been used to calculate per year growth

>rowth rate R 7-5P581t (1J

:/R :uture value */R *resent value

1 "ee'an bank

Assets rowt! of "ee'an Bank

Amount in millions

Kears Total Assets rowt! in L


70/86

/003(/004 "@+$- +-.%3

/004(/00= 1+4@1-% 4".-1

/00=(/010 1"4@$"+ +4.-4

/010(/011 +''@""' +%."%

/011(/01/ +$4@43- 3-.4

-igure /1

2007-2008 2008-2009 2009-2010 2010-2011 2011-20120.00%

5.00%

10.00%

15.00%

20.00%25.00%

30.00%

35.00%

40.00%

45.00%

50.00%

Growth in %

Growth in %

Inter,retation

5he above table and diagram shows the 5otal assets of &ee,an bank from the

year +''$)+'1+. It is evident from the above table that the growth of &ee,an banks

assets started with +-.%3 in +''$)+'' but it is fluctuated with a increase of 4".-1 in

+''$)+'' and after +'' fluctuating the growth increase and decrease like end of +'11)

+'1+@ 3-.4.it can be concluded from this research study that the growth of &ee,an

banks assets is significant rather it has fluctuations.

+e,osits rowt! of "ee'an Bank

Amount in millions

Kears Total +e,osits rowt! in L

/003(/004 $'@+34 +%.''

/004(/00= 1''@333 43.''

/00=(/010 131@'$' 31.''


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/010(/011 1$'@'3' 3'.''

/011(/01/ +3'@4+" 3"."+

-igure //

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

45.00%

50.00%

Growth in %

Growth in %

Axis Title

Inter,retation

5he above table and diagram shows the growth of total deposits of &ee,an bank

in presented. 5he total deposit growth +%.'' in +''$)+'' but after this year increase

the growth 43 in +'')+''% but ended in the last year 2+'1+ 3"."+ so fluctuating the

deposit growth of &ee,an bank

Com,arison of Total Assets: +e,osits and -inancing of "ee'an Bank

Amount inmillions

Kears 5otal 7ssets 5otal (eposits/003(/004 "@+$- $'@+34

/004(/00= 1+4@1-% 1''@333

/00=(/010 1"4@$"+ 131@'$'


72/86

/010(/011 +''@""' 1$'@'3'

/011(/01/ +$4@43- +3'@4+"

-igure /

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

0

50,000

100,000

150,000

200,000

250,000

300,000

Total Assets

Total Deposits

Inter,retation

5he above table and diagram show a comparison of &ee,an banks total assets@

deposits and financing. It can be noted that all three factors were rising with the time but

their increment is not same as shown in the table. In the fig 1." a comparison of all three

factors is presented. Increment in total assets was higher than financing and deposits. It is

also evident from the above fig that the rise is total financing of &ee,an bank is

significantly low as compared to total assets and financing.

/ BankIslami;

Assets rowt! of BankIslami

Amount in millions

Kears Total Assets rowt! in L

/003(/004 1%@'" 3+.11

/004(/00= 34@+$+ $%."

/00=(/010 4"@'3- 31.41


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/010(/011 "@+1 3'.-1

/011(/01/ $4+3- +-.+'

-igure /2

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

Growth in %

Growth in %

Inter,retation

Bank Islamic is the +ndlargest Islamic bank in *akistan. :rom table and fig total

assets it can be 0udged that in the earlier years of their formation they have low growth in

their assets 3+.11@ but +'')+''% increase the tremendous growth of $%." this shows

their strength in the banking industry year but after+''%) +'1' it dropped to 31.41 and

+-.+' respectively.

+e,osits rowt! of BankIslami

Amount in millions

Kears Total +e,osits rowt! in L

/003(/004 1+@4$ +".-1

/004(/00= +$@%$ 1+4.+%/00=(/010 3@1% 3-.4

/010(/011 "'@"-% 3+.3%

/011(/01/ -4+1- +-.%

-igure /G


74/86

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

140.00%

Growth in %

Growth in %

Inter,retation

5he table and fig are showing that BankIslami has got a low share of public trust

in form of deposits in the first year of their operation as the growth rate of their deposits

in the 1styear was around +".-1 it was low deposits. In ne


75/86

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Total Assets

Total DepositsAxis Title

Inter,retation

5he :ig and table are evident that total assets of BankIslami are on the track of

growth@ followed by deposits and financing. 9e can see that their assets were around 1%

million in +'' and since +'1+ they were increased to around $4 million rupees@ deposits

were around 1+ million and till the last year they were around -4 million so the &ee,an

bank growth of financing is also low but significant.

Bur# Bank;

Assets rowt! of Bur# Bank

Amount in millions

Qears Total Assets rowt! in L/003(/004 %@41 3.4'

/004(/00= 13@''% 3$.+1

/00=(/010 1$@-$- 3".%'

/010(/011 +$@-4" "-.4'/011(/01/ 4$@1" $'.-1

-igure /3


76/86

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

Growth in %

Growth in %

Inter,retation

Bur0 Bank is also a growing Islamic bank of *akistan. 5heir total assets and

growth is obtainable in the table and figure from the table it can be seen that their total

assets are increasing rapidly. 5he amount of total assets was around % million in +''$)

and with a growth rate of 3.4'. In the period of +'')% the amount of their assets rose

with a growth rate of 3$.+1 and became 13''% million. 5heir growth rate was 3".%'

in +''%)1' slightly lower than the previous year and total assets were 1$-$- million. In

the period of +'1')11 there was an upward trend in the growth of assets. 5he growth rate

was "-.4' in that period with the 4$@1" million of total assets.

+e,osits rowt! of Bur# Bank

Amount in millions

Qears Total +e,osits rowt! in L/003(/004 "@'-3 3G/GL

/004(/00= -@$" 200L

/00=(/010 1+@-3- 4M/L

/010(/011 +'@341 M0=4L

/011(/01/ 3"%++ 3MG4L

-igure /4


77/86

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

Growth in %

Growth in %

Inter,retation

(eposits growth of Bur0 bank is presented in table and figure. It can be noted that

there persists a great fluctuation in the growth of deposits. 7s it shown in figure 3.+ the

growth rate for +''$) was $".+" but ne


78/86

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Total Assets

Total Deposits

Inter,retation

5he progress of Bur0 banks is relatively is low as compared to previous two banks

but still it is satisfactory because it is new and it was formally known as (awood Islamic

Bank but later it was purchased by Bur0 Bank. Its financing progress is very low but it

continues to growing by leaps and bounds.

Argument

5he purpose of this reading was to calculate the development rate of the &ee,an

Bank@ BankIslami@ Bur0 Bank in terms of assets@ deposits@ financing and also to calculate

for the period of +'')1+. 5he growth of deposits@ assets and financing were determined

with the help of growth rate formula given at the start of this chapter. >rowth rates of

these banks are also given in graphical form to enhance the understanding and to derive

the better results.


79/86

+e,osits rowt! of national bank

Amount in millions

Qears Total +e,osits rowt! in L/003(/004 -+4%3% GG4L

/004(/00= $+$"13 1M21L

/00=(/010 3+134 124L

/010(/011 %+$41' 1122L

/011(/01/ 1'3'%4 11=L

-igure /10


80/86

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

Growth in %

Growth in %

Inter,retation

5he above table and figure shows that the growth of total deposits of ational

bank presented. It can be seen that from the above table that total deposits of ational

bank are decreasing with the time that shows their low position in the industry. But after

+''$) increase the deposits very high as compare to previous year increase 1-.41 in

+'')% and then against decrease every year 14.3 and 11.%3 in +''%)1' and +'11)

1+.

+e,osits rowt! of muslim commercial bank

Amount in millions

Qears Total +e,osits rowt! in L/003(/004 33'11 10L

/004(/00= 3-$"1 11/L

/00=(/010 431+%" 13L/010(/011 4%114- 143L

/011(/01/ "44% 10=ML

-igure /11


81/86

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

Growth in %

Growth in %

Inter,retation

5he above table and figure shows that the growth of total deposits of &uslim

commercial bank in presented. . It can be seen that from the above table that total

deposits of &uslim commercial bank are increasing with the time that shows their strong

position in the industry. But after +''$) decrease the deposits 11.3+ but ne


82/86

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

Growth in %

Growth in %

Inter,retation

5he above table and diagram shows the 5otal assets of ational bank from the

year +''$)+'1+. It is evident from the above table that the growth of ational banks

assets started with $.+ but it is fluctuated with a high of 1".$1 in +'')+''% and low

of %.-% in +''%)+'1'@ before ending at 13.%" in last year 2+'1+.it can be concluded

from this research study that the growth of ational banks assets is significant rather it

has fluctuations.

G "uslim commercial Bank;

Assets rowt! of muslim commercial Bank

Amount in millions

Qears Total Assets rowt! in L/003(/004 443-1" .'$

/004(/00= "11$41 1".3"

/00=(/010 "$'41 11.4$

/010(/011 -"-3+4 1".'4

/011(/01/ $$'++ 1$.3-

-igure /1


83/86

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

Growth in %

Growth in %

Inter,retation

5he above table and diagram shows the 5otal assets of &uslim Commercial bank

from the year +''$)+'1+. It is evident from the above table that the growth of &uslim

Commercial banks assets started with .'$4 but it is fluctuated with a high of 1".3"

in +'')+''% and low of 11.4$ in +''%)+'1'@ before ending at 1$.3- in last year

2+'1+.it can be concluded from this research study that the growth of &uslim

Commercial banks assets is significant rather it has fluctuations.

Com,arison of Total Assets: +e,osits and -inancing of muslim commercial Bank

Amount in

millions

Kears Total Assets Total +e,osits

/003(/004 443-1" 33'11

/004(/00= "11$41 3-$"1

/00=(/010 "$'41 431+%"

/010(/011 -"-3+4 4%114-/011(/01/ $$'++ "44%

-igure /12


84/86

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

0

100000

200000

300000

400000

500000

600000

700000

800000

900000

Total Assets

Total Deposits

Inter,retation

5he :ig and table are evident that total assets of &uslim Commercial bank are on

the track of growth@ followed by assets and deposits. 9e can see that their assets were

around 44 million in +'' and since +'1+ they were increased to around $$ million

rupees@ deposits were around 33 million and till the last year they were around "4 million

so the &uslim Commercial bank growth of financing is also low but significant.

Com,arison of Total Assets: +e,osits and -inancing of national Bank

Amount in

millions

Kears Total Assets Total +e,osits

/003(/004 1$$" -+4%3%

/004(/00= %4-+"3 $+$"13

/00=(/010 1'3'1 3+134/010(/011 11"4%-- %+$41'

/011(/01/ 131-1-' 1'3'%4

-igure /1G


85/86

2007-2008 2008-2009 2009-2010 2010-2011 2011-2012

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Total Assets

Total Deposits

Inter,retation

5he :ig and table are evident that total assets of ational bank are on the track of

growth@ followed by assets and deposits. 9e can see that their assets were around +

million in +'' and since +'1+ they were increased to around 13 million rupees@ deposits

were around -+ million and till the last year they were around 1' million so the ational

bank growth of financing is also low but significant.

CHAPTER

Conclusion

5he growth rate of Islamic banking of *akistan is more than conventional bank.

5o complete this research which was the sample of five banks and the sample consist of

two conventional and three Islamic banks that include ational bank of *akistan 2B*@

&uslim commercial bank 2&CB@ Bur0 bank imited@ BankIslami imited@ &ee,an

Bank imited. 5o conclude this research we suggested two variables which are growth in


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assets and growth in deposits. :or this purpose to check the growth in assets and deposits

we used secondary data that is obtained from the financial statements of these related

banks. 5he total assets of ational bank are on the track of growth@ followed by assets

and deposits. 9e can see that their assets were around + million in +'' and since +'1+

they were increased to around 13 million rupees@ deposits were around -+ million and till

the last year they were around 1' million so the ational bank growth of financing is also

low but significant. 5he above table and diagram shows the 5otal assets of ational bank

from the year +''$)+'1+. It is evident from the above table that the growth of ational

banks assets started with $.+ but it is fluctuated with a high of 1".$1 in +'')+''%

and low of %.-% in +''%)+'1'@ before ending at 13.%" in last year 2+'1+.it can be

concluded from this research study that the growth of ational banks assets is significant

rather it has fluctuations. 5he above table and diagram shows the 5otal assets of &uslim

Commercial bank from the year +''$)+'1+. It is evident from the above table that the

growth of &uslim Commercial banks assets started with .'$4 but it is fluctuated with

a high of 1".3" in +'')+''% and low of 11.4$ in +''%)+'1'@ before ending at

1$.3- in last year 2+'1+. (eposits growth of Bur0 bank is presented in table and figure.

It can be noted that there persists a great fluctuation in the growth of deposits. 7s it

shown in figure 3.+ the growth rate for +''$) was $".+" but ne

final project of introduction

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