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FAYSAL BANK LIMITED
Faysal Bank Limited (FBL) has been serving the Pakistan economy
and market since 1987, first as a branch network of our Bahrain
principals and since 1996 as a locally incorporated bank.
The strength and stability of FBL is evident through the Credit
Rating assigned to it by JCR-VIS Credit Rating Company Limited
of AA- (Double A minus) for long to medium term and A-1 (A
one) for short term.
The Pakistani Operations of FBL covers:
Product & Services:
Ijarah (Leasing):
Clients use Ijarah financing mainly for financing purchase
of plant and machinery. If assets subject to lease are to
be freshly acquired, Bank may appoint an agent (could be the
client) to do so on its behalf. If Client has already acquired
the equipment, Bank will purchase it from Client and lease
it back.
- Bank and Client sign a Lease Finance Agreement whereby
Client agrees to take on lease from the Bank for specified
assets for an agreed tenor.
- Bank appoints an Agent for acquisition of assets, if
not already in possession of Client.
- Bank intimates Client of acquisition of assets and delivers
to place specified by Client.
- Term of lease starts from date Client takes possession
of assets, whether constructive or physical.
- Client pays a monthly, or quarterly rental to the Bank
for the use of the assets and by virtue of the agreement,
becomes owner of asset only after paying a nominal lease
end value.
Musharakah:
Under Islamic jurisprudence, Musharakah means a joint enterprise
formed for conducting some business in which all partners
contribute financially and share the profit as per pre agreed
upon ratios, while the loss is shared according to the ratios
of financial contribution of each partner. The Musharakah
is an ideal alternate to replace interest based lending with
far reaching effects on both production and distribution of
capital.
Profit sharing ratios in a Musharakah depend entirely on the
estimated profit the business is able to generate.
The Musharakah is a relationship established, by the parties,
by mutual contract and therefore all necessary ingredients
of a valid contract must be present.
The risk of loss inherent in this mode of financing, ensures
that the Bank fully satisfy itself as to the profitability
and feasibility of the business venture as well as to the
integrity of its Musharakah partners.
Modaraba:
This is a kind of partnership where one partner gives money
to another for investing it in a commercial enterprise. The
investment comes from the first partner who is called "Rabb-ul-maal"
while the management and work is an exclusive responsibility
of the other, who is called "Modarib" and the profits
generated are shared in a predetermined ratio.
There are two types of Modaraba namely:
- Al Modaraba Al Moqayyadah: Rabb-ul-maal may specify a
particular business or a particular place for the Modarib,
in which case he shall invest the money in that particular
business or place. This is called Al Modaraba Al Moqayyadah
(restricted Modaraba).
- Al Modaraba Al Mutlaqah: If Rabb-ul-maal gives full freedom
to Modarib to undertake whatever business he deems fit,
this is called Al Modaraba Al Mutlaqah (unrestricted Modaraba).
However, Modarib cannot, without the consent of Rabb-ul-maal,
lend money to anyone. Modarib is authorized to do anything
which is normally done in the course of business. If they
want to have an extraordinary work which is beyond the normal
routine of the traders, it cannot be done without express
permission from the Rabb-ul-maal. Modarib is also not authorized
to (a) keep another Modarib or a partner (b) mix his own
investment in that particular Modaraba without the consent
of Rabb-ul-maal.
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