'The performance review of Faysal Bank


VP, Faysal Bank

Aug 19 - 25, 2002

The desire for an interest free mode of banking has been prevalent in Pakistan for many years now. Its eventual formalisation in the banking sector has been delayed pending the development of appropriate products, systems and procedures in keeping with the spirit of Shariah. The transition from the existing to the proposed system may take time and effort but the banks aspiring towards the new system can learn a few lessons from those who have been endeavouring to undertake banking in Shariah approved modes for the past decade or more. Many objections are raised on the Shariah compliance of these institutions but one should keep an open mind as to the imperfection of the environment these banks operate in and give credit to them for having introduced and continue to do business in Shariah approved modes, even if it means lower returns and innumerable setbacks.

Faysal Bank is one such full service commercial bank offering, investment, corporate, commercial and retail banking services. Faysal Bank has played a pioneering role in the introduction and practice of Islamic Banking in the country. Our Islamic banking character places us in a unique position, one of educators where we have over the years of our existence, practically shown to customers, competitors and the market in general, how Shariah compliant banking works. Faysal Bank is a bank of the DMI group (Dar al Maal al Islami Trust) which is a group of financial institutions set up solely for the purpose of introducing Shariah approved financial systems. The DMI is based in Geneva, Switzerland and has subsidiaries worldwide. Faysal Bank is one of these subsidiaries.

Faysal Bank, in order to fulfil its core mission the introduction of Islamic Banking, has suffered some financial setbacks in the past. With the grace of Allah and our persistent efforts to make Islamic banking a feasible option, the last couple of financial years have shown profitable operations.

Faysal Bank is a dynamic and progressive organisation. Keeping its core values intact, it is not hesitant to take bold initiatives to achieve its goals. We are co-sponsors of the Fayzan Modaraba, a manufacturing Modaraba in which ICI, Al-Meezan and Pak Kuwait as are the other participants. This again is another step towards our commitment to Islamic Banking.

In our role as developers and introducers of new modes of financing, we have not forgotten our retail customers. At Faysal Bank, we have undertaken many consumer initiatives lately to improve branch premises, enhance service standards, introduce new deposit products, enter into strategic alliances with other service providers to give our own customers maximum benefits.

The Bank has lately stepped into the area of consumer finance and with the grace of Allah has achieved highly desirable results. The Faysal Car and Consumer Durables Finance scheme has been well received by the market for being based on the Shariah approved mode of Ijara. The Bank also plans to introduce more new and innovative consumer asset products in the future.

Our work on development of Shariah compliant products, both asset and liability, is an on-going process for which we take the advise and guidance from acknowledged experts of Islamic finance. Our development of Shariah approved trade financing systems is underway which will eliminate many of the objectionable traits of such financing.

Faysal Bank is in an expansion phase. It has opened 6 new branches since last year and plans another 5 by the end of this year.

Over the last 15 years of its existence not only have the employees of Faysal Bank been trained and honed as Islamic Bankers, who gauge every transaction from the compliance angle, but a great deal of credit for our success goes to our customers. It is because of the support and patronage of these customers that our commitment to Islamic banking gains added strength over the years and we are able to fulfil our mission.