We actively contribute to the community by developing its resources and encouraging the economic growth.
We are proud to announce that by the grace of Allah The Bank of Khyber has achieved another milestone and has converted
11 of it's conventional banking branches into Islamic Banking Branches. which are as under:
- Hayatabad Branch
- Nowsherhra Branch
- Bannu Branch
- Quetta Branch
- Timergarah Branch
- Tank Branch
- Hangu Branch
- Abbottabad Branch
- Mansehra Branch
- Charsadda Branch
- S.I.T.E Karachi Branch
Opinion from customers of these branches have been sought to know their desire for conversion of their deposits and advances to profit and loss sharing system of Islamic Banking where neither any kind of Riba (interest) is paid nor received. In this system depositor’s money is invested in businesses under the direction of Shariah Supervisory Board and then net income received is distributed in the ratios of deposits on the basis of weightages after deducting banks expenses and management fee. This conversion has been done under the guidance of independent Shariah Supervisory Board comprised of the following internationally renowned Islamic Scholars.
|Prof. Khurshid Ahmad
|Justice Mufti Muhammad Taqi Usmani
|Dr. Mahmood Ahmad Ghazi
| Mufti Ghulam-ur-Rehman
|Dr. Shahid Hassan Siddiqui
|Syed Muhammad Abbas
A part from guiding in the conversion process, the Board reviews the activities and approves the new products and services offered by IBB(s) to ensure that all its activities are Shariah complaint.
The Shariah Supervisory Board has approved following products to be offered by the IBB to start the Islamic Banking Operations.
Murabaha is a particular kind of sale in which the seller discloses his cost to the buyer and adds a certain profit to it to determine the selling price. As an asset is being traded in this transaction hence Murabaha must at all times be considered a trade transaction and not a loan.
Using Murabaha as a financing instrument, the Bank purchases certain goods (as required by the client) and sells them to the client on a cost plus profit basis. The bank’s cost can include all expenses incurred in the acquisition of goods such as transportation, LC charges, marine/in transit insurance, sales tax and other Govt. levies etc. Payment of the selling price is mostly deferred but it can also be on spot. The profit may be added on lump sum or as a fixed percentage of the cost.
The banks profit is determined at the time of sale of goods to the customer. The bank is neither entitled to take more profit than that pre-determined profit nor it can legally take.
Ijarah wa Iqtina
"Ijarah" is a term of Islamic fiqh. Lexically, it means 'to give something on rent'. In the Islamic jurisprudence, the term 'Ijarah' is used for two different situations.
The type of Ijarah, which relates to the usufructs of assets and properties, and not to the services of human beings, is relevant for Islamic banking. 'Ijarah' in this sense means 'to transfer the usufruct of a particular property to another person in exchange for a rent claimed from him.' In this case, the term 'Ijarah' is analogous to the English term 'leasing'. Here the Lessor is called 'Mujir', the lessee is called 'mustajir' and the rent payable to the Lessor is called 'ujrah'. But there are basic differences between conventional Leasing and Ijarah-wa-Iqtina. In conventional leasing the profit is for money invested in the property/ machinery whereas in Ijarah-wa-Iqtina the profit is the rent for use of property/machinery. Therefore inconventional leasing the rentals start from the day the Lessor makes payment for the machinery/property whereas in Ijarah-wa-Iqtina the rental starts from the day the property is handed over to the lessee so that he is able to use that property or machinery.