June 29 - July 5, 2009

A. Mannan, the CEO, Dubai Islamic Bank Pakistan feels that one of the strong points behind the success of Islamic banking is that all products of the Islamic banking are asset based unlike conventional banking where papers and securitization of the assets are in vogue. We should not look at Islamic banking in isolation as the Islamic banking is not an exception to the global recession. However as compared to the conventional financial regime, the Islamic financing is relatively safer due to its focus of prudence as well as quality of the assets.

It was a pleasant surprise to see a young CEO speaking on complex financial issues with a great amount of confidence and maturity while pleading the Ideology of Islamic banking and its benefits both for the customers and the financial system reflected in what he referred the tremendous response of the market.

Mannan is a dynamic professional who has been associated with leading banks in local and global markets. He was appointed CEO of Dubai Islamic Bank Pakistan Ltd. (DIBPL) in 2007 where he successfully managed to establish DIBPL as a world class Islamic bank excelling in Consumer, Corporate and Investment banking.

He said with a great sense of satisfaction while many banks had shelved heir consumer financing products in the face of economic slowdown and due to shockwaves of the world financial meltdown particularly the car and home financing, Dubai Islamic Bank continued to serve the people with these products and with the blessings of Almighty Allah these two products did not suffer from major defaults or non performing loans.

It may be mentioned that prior to joining DIBPL, Mannan was Deputy CEO of UBL, one of Pakistan's largest banks. He was instrumental in turning around UBL and launching the consumer banking business from the scratch. Before UBL, Mannan was associated with Citibank where he was heading the Cross Sell business in USA and in Pakistan he was part of the pioneering team which set up the consumer banking business.

He said that one of the major reasons for stability in the Islamic banking is that unlike conventional financial system it does not create value without assets which protect the Islamic system from any major loss. He referred the global financial meltdown which was stemmed from the sub-prime or mortgage system in the United States or the European countries where the value of the mortgage was created with backing of the assets.

Since Islamic banking does not have the structure of creating value without assets, it becomes relatively safer from any unforeseen damages, he remarked. However, there are some risks faced by Islamic banking as well as conventional banking. If you provide some loans to the trade or industry for purchasing any product or for investment, Islamic banks do it on Halal basis or without interest as it becomes partner in profit or loss.

When asked to comment on the perception that there is difference of title only otherwise the interest or interest free is the same thing we just have changed the name of interest, he did not agree to that idea and said in fact it is the way of using things. For example, we slaughter the chicken in a Halal way while if you slaughter it in a mechanical way without applying the Halal way it becomes different, hence intention behind any business matters in any way. He gave another interesting example that Nikkah (marriage) is document between two parties which is respected by the society while the same thing without document becomes an evil, so intention counts very much in lives, he asserted.

He referred a very interesting historic fact that Islam is the first religion which encouraged the trade, earlier trade was considered as a bad profession. Prior to Islam the God of thieves was considered as the God of trade.

When his attention was drawn towards increasing size of bad loans mainly because of high interest rates, and why do Islamic banks which are operating non interest base banking cash on the situation and capture the huge market of manufacturing sector, he once again reiterated that Islamic banks do business which is always asset based. He said that in the present scenario the highest losses faced by the conventional banks are on personal loans because they are not asset based and if one declares he has no money to pay back, the banks have no way to recover the losses because the personal loans are not backed by the assets, hence the Islamic banking does not believe in any product which is without asset base. That is a reason which saved the Islamic banks from huge losses.

Actually the prudence of quality assets helped Dubai Islamic Bank to be well-off as compared to other banks especially in the area of car financing and house finance where it has no major defaults as compared to other banks which stopped car financing due to increasing infected portfolios, he observed.

He said that Dubai Islamic Bank does not invest in the equity market yet he disclosed that Dubai Islamic Bank intends to get listed with Karachi Stock Exchange within next one year.

Regarding Dubai Islamic Bank (DIB), Manan said it is one of the UAE's top five banks and the world's third largest Islamic bank established in 1975 as the first Islamic bank to have incorporated the principles of Islam in all its practices. DIB is a public joint stock company and its share is quoted on the Dubai Financial Market. Dr. Hussain Hamid Hassan, world renowned Islamic scholar is the Chairman of the Shariah Board of DIB.

In Pakistan, DIBPL, which is a 100% owned subsidiary of DIB, commenced operations in 2006 and currently has 25 strategically placed branches across 10 major cities of the country.

DIBPL is now running profitable operations in Pakistan since the last quarter of 2008, with an expected growth in the year 2009.

DIB has won the respect of its peers around the world. Dubai Islamic Bank Pakistan recently won "Pakistan deal of the Year" award at the 4th Annual Islamic Finance News Awards. The award category highlights Government of Pakistan's three-year PKR6.525 billion (US$85 million) deal in September 2008 by Pakistan Domestic Sukuk Company led by Dubai Islamic Bank.

In addition to Pakistan's operations, DIB has a representative office in Turkey, a fully operating office in Iran and has obtained approval for establishment of an Islamic Bank in Syria.



Meezan Bank after a thorough study and pros and cons launched its latest consumer finance product" Meezan Labbaik" with a view to the facilitate consumer from middle income group to perform Hajj and Umrah in an organized manner.

This product is expected earn credibility, customer base and above all blessings of Allah for initiating this noble product, said Irfan Siddiqi, President, CEO of Meezan Bank at the launch ceremony.

He was accompanied by the entire team of the product looked after by Imran Usmani the Shariah Advisor of the bank, while Chief Operating Officer Ariful Islam, and Product Manager Fahim Siddiqi were also present on the occasion.

Replying to a question regarding impact of the global financial meltdown and economic recession on Islamic Banking, Iran said generally speaking the banking sector in Pakistan was least affected of what it is called the financial Tsunami including Islamic Banks however Islamic Banks were safer than the conventional one due to blessings of Islamic Mode of financing which as a principle keeps away from venturesome profiting. Besides that the growth rate of the Islamic Banking which is 5 percent of the total industry is growing steadily in the domestic market.

When asked to comment on the growing rate of Non-Performing Loans in the conventional banking and its impact on Islamic banking he said with a sense of confidence that impact of economic slowdown is a ground reality, yet the Islamic Banks hardly have one percent of the bad loans or NPL, he said.

The new product "Meezan Labbaik" will not only facilitate customers for performing Hajj and Umrah but also the pilgrims of Ziyarat of holy places of Makkah and Madinah with comfort and peace of mind. This product will be available through its network of 166 branches in 40 cities across Pakistan under the name 'Meezan Labbaik' - a completely Halal and Riba-free product.

On opening a 'Meezan Labbaik' account, Meezan Bank will facilitate the customers for all matters related to the Holy act of performing Hajj or Umrah and will provide one-stop facilities including Visa processing, ticketing through a designated travel agent, meet and assist, hotel reservations, Ziyaraat and other travel arrangements.

Meezan Bank has launched this product to provide comfort, convenience and security to pilgrims so that they can perform Hajj and Umrah with peace of mind and at an affordable cost. The especially designed packages are well-organized and competitively priced.

'Meezan Labbaik' allow customers to save money to perform Hajj or Umrah or avail an installment plan to pay over a period of time. It is also available to customers who want to make the full payment upfront and proceed immediately for Hajj/Umrah.

By offering this product, Meezan Bank has moved another major step in the direction of achieving its Vision of making Islamic Banking the banking of first choice.


The total liquid foreign reserves held by the country stood at $ 11,770.2 million on 20th June, 2009. The break-up of the foreign reserves position is as under: -

i) Foreign reserves held by the State Bank of Pakistan: $ 8,452.3 million.
ii) Net foreign reserves held by banks (other than SBP): $ 3,317.9 million.
iii)Total liquid foreign reserves: $ 11,770.2 million.