DUBAI ISLAMIC BANK PROVIDING FINANCIAL SOLUTIONS IN ISLAMIC WAY

An exclusive interview with M.A. Mannan, DIB's Country Head

AMANULLAH BASHAR
Nov 13 - 19, 2006

The concept of Islamic Banking is carving a respectable place for itself as a friendly banking system providing financial solutions in a Islamic way on the back of supportive policy and regulations introduced by the State Bank of Pakistan.

These were the complimentary remarks on the stellar growth of Islamic Banking in Pakistan by M.A. Mannan, the Deputy CEO of Dubai Islamic Bank (DIB) in an interview with the Pakistan & Gulf Economist.

In fact, it was really a pleasant surprise to see Mannan, a young Pakistani comfortably settled at the prime position of country chief of a foreign bank. The enviable position was however not bestowed in gift; he is a true professional and carries worldwide exposure as a banker in different leading banks

Mannan is overseeing Pakistan operations since the commencement of the bank's operations in Pakistan. He has over 14 years of banking experience locally and internationally. Prior to joining DIB, he was Deputy CEO & Head of Global Consumer and Commercial Bank of UBL, Pakistan 's third largest bank.

He was instrumental in turning around UBL and launched consumer banking from scratch. He was earlier associated with Citibank USA where he was heading the Cross Sell business and before that was part of the pioneering team to launch Consumer Banking in Pakistan.

Actually, the tremendous economic growth taking place in this country is one of the reasons for DIB to come to Pakistan with an ambitious plan to stay here as a top class bank, however, the prime objective is to serve the cause of Islamic Banking here rather than commercial gains.

The concept is gaining phenomenal growth all over the world which ratifies its depth in the financial mechanism that does not believe in exploitation rather it understands the human chemistry in a friendly way or you may call it banking in Islamic way".

In Pakistan, Mannan said, the bank has come with a financial strength of $100 million and has a plan to set up 100 branches in a couple of years. Currently, DIB has 10 branches in Pakistan, of which six are in operation.

Responding to a question, Mannan was happy to express that DIB initiatives were welcomed with a warm response of the people as the bank has gained a deposit base worth Rs2.5 billion in a short span of six months of its operation.

Actually, some very attractive products including House Financing, Car Financing, Corporate Banking, and another area of SMEs are the target areas of the bank.

So far the bank is operating with the strength of 500 staff, however, the workforce would be enhanced to 3000 with the expansion of its branches and business operation in a couple of years.

DIB has in fact played a significant role in bringing investors from ME to Pakistan, which was an instrumental contribution to the economic growth of Pakistan.

It was interesting to note that DIB believes in research and development and on the back of this concept, it is considering to sponsor a faculty in a leading business university for producing graduates in Islamic Financial Management, Mannan disclosed and added that the DIB was also on its way to set up an institute to impart training in Islamic Banking - a great contribution no doubt.

Incorporated in 1975 in Dubai, Dubai Islamic Bank is historically the first bank in the world that has exclusively specialized in Islamic financing instruments. The bank started its Pakistan operations in March this year with the first branch at Avari Towers, Karachi.

This was followed by commencement of its services in Lahore, Faisalabad and second branch in Karachi at Cloth Market. The bank has a commitment to bring US$100 million investment to Pakistan, under which DIB has acquired license from State Bank of Pakistan to establish a network of 70 branches in the next 18 months.

Dubai Islamic Bank has been very active in attracting foreign direct investment in Pakistan and is working closely with Dubai World and other large business corporations in identifying opportunities and channeling hard flows into the country. In addition, DIB is working closely with the Ministry of Finance, State Bank of Pakistan, the Securities and Exchange Commission of Pakistan and other relevant agencies in developing & promoting Islamic Capital Market products in the country.

FORMATION OF DUBAI ISLAMIC BANK

Incorporated in 1975 in Dubai, Dubai Islamic Bank is historically the first bank in the world that specialized exclusively in Islamic financing instruments.

DIB has a Retail Banking division that offers a range of solution-driven and cost-effective products and services catering to different needs of individual clients. Private banking with DIB provides clients with powerful resources for preserving and growing their wealth through dedicated expertise and close personal attention.

Recognizing women's needs for specialist banking services, Johara Banking Division of DIB combines a comprehensive range of banking facilities with privileges such as shopping discounts and health and educational benefits.

DIB has a wealth of knowledge and experience of the specialist finance needs of the business world. From short-term loans to financing property, import and export shipping, mergers and acquisitions, and the myriad requirements of the dynamic business environment, DIB promises fast decisions, speedy implementation and competitive rates. The bank is a provider of merchant banking, corporate banking and treasury products to the corporate market, and prides itself on its innovative approach, where clients are invariably the dominant priority.

Innovative financial solutions cover corporate finance, investment banking, project finance, trade and commodity finance, capital and debt market products, treasury and corporate banking, international banking services, and securities all under the umbrella of Sharia-compliant Islamic banking structure. The Investment Banking Group in Dubai Islamic Bank is a trusted provider of integrated capital markets and advisory solution to clients worldwide; developing extensive relationship with corporations, financial institutions, governments and institutional investors in the Gulf Cooperative Council countries and beyond.

The network expansion of the bank in Pakistan is part of its global expansion plans and the initial step in fulfilling Dubai Islamic Bank's commitment to bringing US$100 million investment to Pakistan. "Under the same commitment, we have acquired license from State Bank of Pakistan to establish a network of 70 branches in the next 18 months."

Dubai Islamic Bank has been very active in attracting foreign direct investment in Pakistan and is working closely with Dubai World and other large business corporations in identifying opportunities and channeling hard flows into the country. In addition, DIB is working closely with the Ministry of Finance, State Bank of Pakistan, the Securities and Exchange Commission of Pakistan and other relevant agencies in developing & promoting Islamic capital market products in the country.

ISLAMIC BANKING PRODUCTS

Mannan observed that DIB aims to offer state-of-the-art Islamic banking solutions and create a center of excellence in Pakistan for products and professionals in the field of Islamic Banking taking both on global horizons with us.

We will be serving more customers with our cutting edge financial solutions through a world class banking service in the Islamic way. This will include a full suit ranging from entire consumer banking products to wealth management solutions and corporate & investment banking products.

Dubai Islamic Bank, Mannan remarked, has the unique distinction of being the world's first full-fledged Islamic bank, a pioneering institution that has combined the best of traditional Islamic values with the technology and innovation that characterizes the best of modern banking.

Since its formation in 1975, Dubai Islamic Bank has established itself as the undisputed leader in its field, setting the standards for others to follow as the trend towards Islamic banking gathers momentum internationally.

The bank is true to its roots as a customer-centered organization where close personal service and understanding form the basis of all its relationships. Following tradition and heritage along with a commitment to flexibility, innovation and modernity, the bank is providing comprehensive solutions to all the financial needs of the customers of every nature.

Concept of Islamic Banking

Outlining the concept of Islamic Banking, Mannan observed that Islamic banks appeared on the world scene as active players over two decades ago. Over the years, Islamic banking has become one of the world's fastest-growing economic sectors, comprising close on 200 institutions responsible for assets estimated at more than $200 billion. Although it is a very young concept, Islamic Banking has already been implemented as the only system in two Muslim countries; there are Islamic banks in many Muslim countries and a few in non-Muslim countries as well. Today, more than 250 Islamic financial institutions are operating worldwide.

Giving the background of Shariah compliance, he said "We have a Fatwa & Shariah Supervision Board that comprises reputable scholars with extensive experience in law, economics and banking systems and specializing in law and finance as prescribed by Islamic Shariah. The bank's General Assembly and ranks above the Board of Directors appoint the board. Its task is to supervise the development and production of innovative Shariah-compliant investment and financing products. The board is fully competent to issue Fatwas in any matter proposed to it by different business units of the bank, and the Sharia auditors ensure that these are carried out in all banking transactions. The presence of such expert Shariah supervision at DIB is clear evidence of how Islamic banking is practiced in letter and spirit, providing shareholders and customers with complete assurance that all dealings are free from Riba.