Dubai Islamic Bank Report
Table of Contents Chapter 1 INTRODUCTION & HISTORY2 1. 1) Introduction2 1. 2) Products and Services4 1. 2. 1) Products4 1. 2. 2) Services6 1. 3) Departments:14 Chapter 2 COMPANY ANALYSIS18 2. 1) SWOT Analysis:18 2. 2) Competitor Analysis21 2. 3) Financial Analysis23 Chapter 3 MARKETING ANALYSIS24 3. 1) Target Market:24 3. 2) Marketing Mix:24 3. 3) Positioning:26 Chapter 4 EXPERIENNCE & CONTRIBUTION27 4. 1) Account Opening:28 4. 2) CRO:28 4. 3) Relationship Department:29
Chapter 5 SUMMARY & RECOMMENDATIONS30 References32 Appendices…………………………………………………………………………………………………………………………………….. ……………….. 33 Chapter 1 Introduction and History 1. 1) Introduction Thirty years ago, Dubai Islamic Bank (‘DIB’) created history by becoming the world’s first Islamic Bank. Today, Islamic banking has become one of the fastest growing economic sectors with over 300 financial institutions, with assets estimated at over US $300 billion providing Islamic financial services.
Despite huge growth in the sector DIB continues to be the industry pioneer and undisputed market leader to date. Since its inception, DIB has evolved from a retail bank to a fully fledged bank catering to almost all the requirements of its customers in providing Sharia-compliant solutions to major local and international companies. It has constantly upgraded its services to private individuals, who remain a highly valuable element of DIB’s customer base.
By combining the best traditional Islamic values with high-standard technology and innovation, DIB is committed to not only fully comply with the principles of Shari’a in all its financial dealings but to also facilitate its customers who venture into the world of Islamic banking in such a befitting way that they would feel reaping the best rewards of both the worlds. For its outstanding performance and contribution to Islamic financing, DIB received the Best Islamic Bank in the Middle East Award (2006) by both Euromoney’s Islamic Finance Weekly and Gulf Wealth Forum.
DIB has also been awarded the Bank of the year (UAE) at the 2006 Banker Awards. DIB has not only been at the forefront of innovation but has excelled every step of he way. With the launch of Al Islami Internet Banking, DIB has re-affirmed its commitment to promote and develop Islamic banking in line with the requirements of the modern age. For these efforts, DIB received the Golden Trophy at the UAE Web Awards in 2006. DIB is also the first to offer a mobile SMS messaging service in both Arabic and English. Moreover, DIB became the first bank in the Middle East to introduce Internet Protocol (IP) for its Visa card operations.
With path-breaking vision and bold strategies, DIB aims to enhance its status as a world leader committed to the goal of providing “World Class Banking. ” Dubai Islamic Bank Pakistan Limited Dubai Islamic Bank Pakistan Limited (DIBPL), commenced operations in 2006. Since then, DIBPL has undertaken major initiatives to expand its branch network across the country. Under its consumer banking division, the bank is offering state-of-the-art Sharia compliant products that effectively compete with those being offered in the market by conventional banks.
It also has expertise in providing Retail, Private, Small and Medium Enterprises, Corporate, Investment Banking and Advisory services. The Bank launched Pakistan’s first Islamic Visa Debit Card and introduced financial products covering Home Financing, Auto Financing, and Depository products. DIBPL has also introduced Priority Banking and Internet Banking, both of which are being recognized as benchmark products in their respective categories. Besides regular banking services, the Bank is committed to bringing foreign investment to the country.
DIBPL’s corporate wing has actively pursued foreign investors and convinced world renowned giants from the GCC to be part of Pakistan’s economy. DIBPL is 100% owned by Dubai Islamic Bank PJSC (Public Joint Stock Company) and its nominated shareholders. The parent company is a listed company in Dubai. 1. 2) Products and Services 1. 2. 1) Products All the products offered by DIBPL are purely Islamic in nature. Dubai Islamic Bank offers following products. 1- Current Account: Dubai Islamic Current Account is a non-remunerative checking account designed for account holders who need to transact frequently.
It specifically appeals to businessmen and salaried individuals who need to make frequent payments and deposits in their account. The Dubai Islamic Current Account is an ideal low cost option for such customers. Based on the Wadi’a contract, the Dubai Islamic Current Account offers users safe keeping of their cash deposits against DIBPL’s guarantee to provide the depositor his funds on demand. However, the depositor permits DIBPL to use or invest his money in its Sharia compliant investments and is neither entitled to investment profit nor does the account holder bear any risk of loss.
The Current Account is offered in currencies like Pak Rupees, US Dollar, UK Pound, EURO, Japanese Yen and UAE Dirham’s (only for cash deposits, cash withdrawals are not allowed) All entities including individuals, corporations, firms, societies, clubs, government organizations, statutory bodies, public and private institutions can open a Dubai Islamic Current Account with as low as PKR 1000. 2- Saving Account: Dubai Islamic Savings Account is a great investment option for depositors who wish to earn Halal returns on their savings. That’s not all, it allows you the flexibility to withdrawn your funds when ever required.
By investing in the Dubai Islamic Savings Account, the depositor (fund provider or Rabbul-Maal) authorizes DIBPL (fund manager or Mudarib) to invest his/her funds on the basis of unrestricted Mudaraba contract according to the principles of Sharia. DIBPL invests these funds in its Common Mudaraba Pool with other deposits and the shareholders’ equity. The profit on the Common Mudaraba Pool is distributed amongst the shareholders’ and depositors on the basis of agreed upon weightages which take into consideration the tenor, amount of deposit and profit payment frequency of the account.
The Dubai Islamic Savings Account is offered in Pak Rupees and US Dollar All entities including individuals, corporations, firms, societies, clubs, government organizations, statutory bodies, public and private institutions can open a Dubai Islamic Savings Account with a balance as low as PKR 1000. For US Dollar Savings Account, daily balance throughout the month must remain above US $500 to be eligible for profit payment. 3- Fixed Deposit: Dubai Islamic Fixed Deposit Account offers the ideal mix of long and short term benefits to depositors seeking attractive and Halal returns on their savings.
With a history of high profit payouts Dubai Islamic Fixed Deposit Account is an excellent investment vehicle for depositor. By investing in the Dubai Islamic Fixed Deposit Account, the depositor (fund provider or Rabbul-Maal) authorizes DIBPL (fund manager or Mudarib) to invest his/her funds on the basis of unrestricted Mudaraba contract according to the principles of Sharia. DIBPL invests these funds in its Common Mudaraba Pool with other deposits and the shareholders’ equity.
The profit on the Common Mudaraba Pool is distributed amongst the shareholders’ and depositors on the basis of agreed upon weightages which take into consideration the tenor, amount of deposit and profit payment frequency of the account. 4- VISA Debit Card: VISA Debit Card of Dubai Islamic Bank provides the following benefits to the customers. • Global Acceptance • Convenience • Unlimited number of Supplementary Cards • ATM Cash Withdrawal • Funds Transfer across Accounts • Balance Inquiry • Global Customer Assistance Services • Zero Loss Liability Free renewal 1. 2. 2) Services DIBPL offers following services to its customers: 1- Internet Banking DIBPL Branch Banking customers can easily make their monthly rental payments by using Dubai Islamic Internet Banking facility to internally transfer the rental amount from their personal account to the dedicated account. 2- SMS Banking: Now, Dubai Islamic Bank Pakistan Limited brings banking services at your fingertips! Free yourself from the hassle of visiting the branch and enjoy the convenience of Dubai Islamic SMS Banking.
SMS Banking Features • You can select your desired services from a variety of options available • You can block your account, in case of stolen or lost cell phone • 24/7 customer service helpline • Automated help messages on your cell phone 3- Locker DIBPL is pleased to offer locker services to its customers. Our customers can lease a locker for the safekeeping of their valuables for complete peace of mind. Customers are required to pay a security deposit at the time of locker issuance.
This security deposit is refundable once the customer discontinues the service. In addition to the security deposit, an annual rental is payable in advance depending upon the size of the locker. 4- Phone Banking: Dubai Islamic Bank Pakistan Ltd. offers a state-of-the art 24/7 Phone Banking service which provides quality services and financial solutions to esteemed customers. Our highly trained Phone Banking Officers are available round the clock to assist and provide you the services. 5- Problem Resolution Unit:
DIBPL is fully committed to providing a World Class experience to its Customers. However, it needs support to further improve its services. If you come across any problem or query, have a complaint or a suggestion; you can contact Dubai Islamic Phone Banking 6- Corporate Banking The world of finance belongs to those who shape it. DIB has taken a leading role in shaping the dramatic transformation that UAE has experienced in the last two decades. Now, with the same vigor, the Bank comes to assist businesses in Pakistan.
DIBPL provides a wide range of services specifically designed to assist Pakistani businesses. You can benefit from our: • Cash Management Services • Trade Related Services • Investment Banking Services A) Cash Management DIBPL Cash Management offers comprehensive end-to-end Sharia compliant solutions to meet your cash flow requirements. With our help, you can reduce turn around times for your accounts receivables, better manage your payables, and benefit from our value-adding MIS reports. GL reconciliation would have never been easier for you.
Collections DIBPL is an expert at facilitating the collection of sales proceeds and converting your Receivables into Funds Available. You are provided the facility of maintaining a single concentration account. Collections from all over Pakistan (cash/ cheque/ pay order/ demand draft) will be credited to this main account via DIBPL’s real time online branch network. Bulk & Data Processing DIBPL has formed project-to-project alliance with National Institutional Facilitation Technologies on processing and collection.
DIBPL will perform the role of the financial institution while National Institutional Facilitation Technologies will provide the expertise in the area of bulk processing. National Institutional Facilitation Technologies has 10 years of experience in this area and has previously done such projects for Sui Southern Gas Corporation and Lahore Electric Supply Company successfully. Payment Product The product facilitates clients in managing their outflow of funds. The outflows can be through Pay Order/Demand Draft or by way of electronic cheques issued at the clients office.
Depository Services / Liquidity / Funds Management In DIBPL’s suite of Shari’a approved Investment Depository Products, your organization will certainly find just the right combination of attractive returns and enhanced liquidity that it requires. Enhance your funds management like never before. Foreign Exchange Remittances The Cash Management Group at DIBPL is adept at handling outward/inward remittances through State Bank of Pakistan. Be it money transfers within Pakistan or outside, DIBPL will have a product to meet your needs safely and efficiently.
The Bank’s extensive network of correspondent banks in all major countries of the world is all that your business will require. Cash-In-Transit Services DIBPL can arrange for its clients a secure pick up of cash from the customer’s door step for deposit at DIBPL’s nearest branch. B) Trade Related DIBPL offers a range of solutions to help customers in their trade transactions. The Banks rapidly expanding local network befittingly complements the extensive experience it has acquired in managing correspondent relationships across the globe.
DIBPL’s Sales and Service Outlets have the infrastructure in place to ensure that customers’ documents are processed accurately and in the fastest possible time. DIBPL trade professionals look forward to sharing with you their trade related knowledge. Import Murabaha Import Murabaha is a product, used to finance a commercial transaction which consists of purchase by the Bank (generally through an undisclosed agent) the goods from the foreign supplier and selling them to the customer after getting the title to and possession of the goods. Murabaha financing is extended to all types of trade transactions i. . , under Documentary Credits (LCs), Documentary Collections and Open Account. Wakala Istithmar Facility (Exports) A unique structure tailor-made for the exporters of the country, the Wakala Istithmar facility which has been developed under the direct guidance of Sharia to meet the working capital requirements of exporters and local manufacturers speaks volumes about our Shari’a expertise and edge in bringing new Shari’a compliant products to the market for promotion of Islamic banking and ridding those who desire Halal income from interest-based financing.
Wakala Cum Istisna’a Facility (Local Supplies): Istisna’a is a contract for manufacturing or construction whereby the manufacturer sells to the buyer, goods of specific description, at a fixed price, which the manufacturer shall make from raw material of its own and deliver to the buyer at a future date. Istisna cum Wakala is a two-leg short-term trade finance solution which enables a manufacturer to fulfill his payment obligation under a documentary credit presentation and allows time for the goods to be cleared, manufactured and stocked.
Once the goods are delivered to the buyer, the customer then sells the goods, in its capacity as the agent of the bank to creditworthy and trusted buyers and realizes the sale proceeds on behalf of the Bank. Such finances are offered in conjunction with L/Cs to corporate customers under Wakala Istisna facility. Guarantee: A guarantee is issued by DIBPL (the guarantor) on behalf of its customer (the applicant) in favor of a third party (the beneficiary), for fulfillment of specifically defined contractual and/or financial obligations of the applicant.
If the obligations are not fulfilled by the applicant, the guarantor will pay up to a certain amount to the beneficiary on non-performance of the obligations by the applicant. Exchange Regulations for Guarantees in Pakistan are governed under Chapter XIX of Foreign Exchange Manual (FEM) of the State Bank of Pakistan. Internationally, (ISP-98) International Standby Practices 1998 of International Chamber of Commerce (ICC) Publication No. 590 also apply. C) Investment Banking With its team of seasoned professionals, DIBPL has become the Investment Bank of choice for local and regional clients in a short p of time.
DIBPL leverages the regional expertise and local knowledge to create an efficient blend of solutions for our customers. DIBPL’s Investment Banking provide its clients with a unique combination of expertise, broad range of investment banking/financial services and access to top regional decision makers. DIBPL derive strength from our team that has unrivalled experience in dealing with the largest M, Advisory and Fundraising transactions in the country. 7- Consumer Financing A) Home Finance Dubai Islamic Home Finance is the key to your dream home and we are eager to put this key in your hands.
Using the Musharaka cum Ijara model, the Bank enters into a partnership with you and helps you in fulfilling your dream of owning a home quickly, conveniently and in a fully Shariah compliant manner. Whether you want to buy, renovate or simply wish to switch from your present home finance with any other bank, DIBPL’s would be the best Shariah compliant alternative. Currently Dubai Islamic Home Finance is offering three product variants: •Home Purchase. •Purchase of undivided share (Home Renovation). •Purchase of undivided share of property from other bank (Balance Transfer)
B) Auto Finance Dubai Islamic Auto Finance offers a world class auto finance facility that enables you to get a car quickly, conveniently and in a fully Sharia compliant manner. Using Musharaka cum Ijara model to finance your car, steer yourself towards peace of mind and fulfillment of your desire. C) Business Finance Dubai Islamic Business Finance is a shariah compliant term finance facility which provides a complete solution for fulfilling the financial needs of your business. Using the Shirkatul Melk cum Ijara model, Dubai Islamic Bank Pakistan Ltd. DIBPL) enters into a shirkatul melk relationship with you by purchasing an undivided share of your residential property and subsequently leases to you this undivided share in the property against monthly rentals thus helping you in fulfilling your business needs conveniently and in a fully Shariah compliant manner. This product is available for new as well as those who already have a business finance facility from another bank and wish to bank the Islamic Way. Features There are so many reasons that make Dubai Islamic Business Finance the right choice.
It is 100% Shariah Compliant an customer can select from Financing amount of Rs. 500,000 and financing up to Rs. 20 million. DIBPL offers Fastest processing time and affordable monthly payment plan. Customer can finance up to 70% of your property value. 8- Al-Islami Saving & Takaful Plan Dubai Islamic Bank Pakistan Limited (DIBPL) is proud to introduce Al-Islami Saving & Takaful Plan in collaboration with Pak Qatar Family Takaful Ltd. (PQFTL) Al-Islami Saving Takaful Plan is a Shariah compliant alternative to conventional insurance, offering a unique combination of saving , investment and protection.
The Al-Islami Saving & Takaful Plan offers you peace of mind and takes care of the future of your loved ones by offering a saving plan and providing Takaful coverage in event of death to your beneficiaries. So rest assured, with Al-Islami Saving and Takaful Plan, your future plans are in safe hands. As an individual you have many dreams: • A college education for your child from a prestigious university • A dream wedding for your beloved daughter • Your spiritual journey to perform Hajj • A comfortable retired life with enough savings to take care of you and your loved ones Any other financial objectives you may want to achieve The Islamic concept of Takaful The word Takaful is derived from Arabic verb Kafala, which means to guarantee, to help, to take careof one’s needs. Takaful is a system based on the principle of Ta’awun (mutual assistance) and Tabarru (voluntary contribution where risk is shared collectively against loss or damage to any one of them as defined in the pact. Takaful is operated on the basis of shared responsibility, brotherhood, solidarity and mutual cooperation. 1. 3) Departments: DIBPL has following departments 1- Cash department:
Cash department performs following functions Receipt: The money which either comes or goes out from the bank, its record should be kept. Cash department performs this function. The deposits of all customers of the bank are controlled by means of ledger accounts. Every customer has its own ledger account and has separate ledger cards. Payment: It is a banker’s primary contract to repay money received for this customer’s account usually by honoring his cheque. 2- Clearance Department: A clearing house is an association of commercial banks set up given below for the purpose of interchange and settlement of credit claims.
The function of clearing house is performed by the central bank of the country by tradition or by law. In Pakistan, the clearing system is operated by the SBP. If SBP has no office at a place, then NBP, as a representative of SBP act as a clearing house. The easy, safe and most efficient way is to offset the reciprocal claims against the other and receive only the net amount owned by them. This facility of net interbank payment is provided by the clearing house. The representatives of the local commercial banks meet at a fix time on all the business days of the week.
This meeting is held in the office of bank that officially performs the duties of clearing house. The representatives of commercial banks deliver the cheques payable at other local banks and receive the cheques drawn on their banks. The cheques are then sorted according to the bank on which they are drawn. A summary sheet is prepared which shows the names of banks, the total number of cheques delivered and received by them. 3- Advances Department: DIBPL gives loans to the borrowers for different purposes. These loans are given for various sectors for different periods.
Small Finance, Cash Finance, Personal Loans, Demand Finance, Running Finance, Corporate Finance, Export Import Financing, House Building Finance. 4- Remittance Department: Another important department in the bank is remittance. People send their money to other persons and organizations through various ways i. e. bank draft, telegraphic transfer, mail transfer, coupons, Govt. Draft and Western Union Money Transfer etc. It works both inward and outward. DIBPL offers the following forms the remittance. • Demand Draft • Telegraphic Transfer • Pay Order Mail Transfer • Safe custody of specimen signature book • Preparation of periodical statements • Any other work/duty assigned by manager 5- Deposits Department: Customers keep their savings in PLS saving accounts and businessmen save their money in bank current accounts. DIBPL gives profit on saving and special saving accounts. 6- Foreign Exchange Department: This department mainly deals with the foreign business. The main functions of this department are: • L/C dealing • Foreign currency account dealing • Foreign Remittance dealing 7- Compliance Department:
Role of branch compliance department is to reconcile the prescribed frequencies, investigate long pending reconciliation item, and ensure correct treatment every half year and clearing system service branch-in major cities. Internal control is the integration of activities, plans, attitudes, policies and efforts of the people of the bank working together to provide reasonable assurance that the organization will achieve its objectives and mission. 8- Human Resource Management Department: Human Resource Management Department works for the betterment of the employees.
Enhances skills, training management, service benefit, wages, medical facilities, staff loans are basic function of this department. 9- Information Technology Department: Bank’s data collection and information system run by Regional Data Collection Center. This department manages staff training programs regarding computer. Chapter 2 Company Analysis DIBPL being a quality organization strives to provide quality to all its stakeholders, customers, employees and environment. In Pakistan, it is operating in a very volatile economic and political environment. The detail of its analysis is given in following sections. . 1) SWOT Analysis: SWOT analysis is an effective technique to evaluate various aspects of an organization. Strengths: 1) DIBPL has this privilege to be the first in the Islamic Banking sector which give DIBPL a competitive edge over all other banks and being the pioneer of this industry. DIBPL is enjoying major share of it. 2) The first international Islamic Bank in Pakistan with a network of over 80 branches. 3) The members of Shariah Supervisory Board of DIBPL are internationally renowned scholars, serving on the boards of many Islamic Banks operating in different countries. ) Being an Islamic Bank, DIBPL has a wide national network. As an emerging markets bank, it has branches in all major cities of Pakistan with the facility of online banking, it is very easy for its customers to transact all over the country. 5) DIBPL provides online banking service. Online banking service means that a customer can withdraw and deposit his money at any branch in the country. Where this service is not present, cheque has to be presented only in that branch on which they are drawn. But with this facility, a person has access to its funds at any branch of the bank. ) There are many value added features in the products offered by the bank. ATM cards are provided with every account. Other features are present in various products. The priority customers enjoy a much pampered status at the bank. 7) The employees at the bank provide impeccable customer service to their customers. 8) Customers are treated with great respect and honored to the utmost degree. 9) The working environment of bank is very friendly and cooperative. There is no bossiness in the higher management. The upper management consults its staff in making decisions and provides them independence in their job areas.
Weakness: 1) Till the last year, DIBPL had a totally different perspective. The management was of the view that the customer should come to them and they don’t need to go to customer. But in this era of mass marketing and advertising, it is not possible to stay in competition without these tools. The bank has now changed its perception arid has started an effective marketing and advertising strategy. But the previous gaps are still there and there is lack of awareness in the people about the bank and its products. The bank needs to improve in marketing and advertising areas. ) It was observed in the bank that the degree of satisfaction of employees was quite low. First of all, the pays are lower those offered in other banks. Secondly, the employees are given targets that are too difficult to achieve. For example, the targets given to the sales personnel and service department are higher than any other bank in the country, be it a local bank or a foreign bank. This makes a job too stressful and tensed. It is good to keep people under a continuous move, but to overstress them can be harmful to them as well as to the organization. ) Due to the dissatisfaction of staff and recession, there is high turnover among them. People who find other alternatives do not stay with the bank. Therefore, the bank incurs loss in their training and development. Opportunities: 1) Home financing sector can be targeted to maximize profits. 2) Growing demand of Islamic products and services 3) Venturing into Islamic groups outside the countries as opportunity to expand business in UAE and Gulf states. 4) Coming up with the products for the SME to target the medium level customers 5) Doing business with the companies having Islamic mindset i. e.
Islamic Financial Institutions 6) Increase branch network within the country 7) The innovative service of Islamic Insurance called Takaful Threats: 1) Right now there are a few banks that are providing Islamic banking services in addition to DIBPL. These banks include Bank Islami, Al-Barkah Bank, Meezan Bank and some branches of Bank Alfalah which are dedicated for Islamic Banking services. That’s why there is no intense threat for the DIBPL in the near future but it is not difficult to say that more banks may enter in this field as the awareness of Islamic banking is increasing among the public.
Therefore the DIBPL should not be contented to its present market share but should strive for providing better and better and modern services. 2) Due to the increase in the conventional commercial banks, there is an increase in competition. Also there is a lot of aggressive marketing by the competitor banks. This is also threat for DIBPL. Reviewing this SWOT analysis from time to time would help evaluate bank’s position. It would help the management in comparing their strengths of the past with those of the present and to what extent the management has been able to overcome the weaknesses. . 2) Competitor Analysis In Islamic Banking sector, the competitors of DIBPL are Bank Al-Barkah, Bank Islami, Meezan Bank and some branches of Bank Alfalah which are dedicated for Islamic Banking services. Two major competitors of DIBPL are: Meezan Bank Meezan Bank is an Islamic bank based in Karachi, Pakistan. The Bank commenced operations in 2002, on being issued the first-ever Islamic commercial banking license by the State Bank of Pakistan; in 2012 Meezan Bank completed a milestone of 10 years of Islamic Banking in Pakistan. Meezan Bank Ltd. s a publicly listed company with a paid-up capital of Rs. 9 billion (March, 2012). The Bank is sponsored by leading financial institutions from Pakistan and the Middle East that include Noor Financial Investment Co. , Kuwait, Pakistan Kuwait Investment Company (Pvt. ) Limited and Islamic Development Bank, Jeddah. The JCR-VIS Credit Rating Company Limited, has rated Meezan Bank’s short term rating at A-1+ (A-One Plus), the highest standard in short term rating, and rated the long-term entity rating at AA- (Double A Minus) with stable outlook.
The Bank offers a range of personal and corporate Islamic banking products and services through a retail banking network of over 280 branches in 88 cities. Backed by a state-of-the art T-24 core banking system, the branch network is supported by 24/7 banking services that include over 200 ATMs, Meezan VISA Debit Cards, Internet Banking, SMS alerts and a 24-hour Call Center. Meezan Bank has an in-house Shariah Advisor and a Shariah Supervisory Board composed of Shariah scholars; the Bank operates strictly under the principles of Islamic Shariah and is well recognized for its product development and Islamic Banking research and advisory.
Meezan Bank has been consistently recognized as the best Islamic Bank in Pakistan by various local and international institutions over the past several years including ‘Best Islamic Financial Institution in Pakistan’ by Global Finance magazine and ‘Best Islamic Bank in Pakistan’ by Islamic Finance News of RED money Group, Malaysia. (Appendix I) BankIslami Pakistan Limited BankIslami Pakistan Limited is located in Karachi, Sindh, Pakistan. BankIslami Pakistan Limited was the first Islamic Commercial Bank to receive the Islamic banking license under the Islamic banking policy of 2003 from State Bank of Pakistan on March 31, 2005.
The Bank started its operations from April 7, 2006 and offers shariah compliant retail banking, investment banking, consumer banking and trade finance products. The Bank intends to focus on Wealth Management as the core area of business and plans to soon launch Proprietary products, and integrated financial planning services. The Bank has a nationwide presence, its branch network consists of 102 branches & sub branches spread over 49 cities of Pakistan. BankIslami is the Joint venture project of three groups namely Jahangir Siddiqui & Co. Pakistan, Randeree family, Bank. The Bank is also publicly traded on the Karachi Stock Exchange.
The Bank is assigned a long term entity of ‘A’ and short term rating of ‘A-1’ by Pakistan Credit Rating Agency Limited (PACRA), reflecting BankIslami’s well conceived business strategy and establishment of effective operating platform by the Bank to execute the business strategy. BankIslami has been able to build a strong image by using smart marketing ideas that resonate well with the public mind. For example, the calligraphy of the Bank’s name in Urdu has been done by the same calligrapher Shafiq uz Zaman who has been working in the Holy Mosque of Medina in Saudi Arabia. (Appendix II) 2. ) Financial Analysis The analysis of balance sheet of bank shows that current liabilities increased over the time (Appendix III). The increase in liabilities and increase in loan shows that company wants to have more cash in hand rather than lending it to others and losing the return on investment. As for as the fixed liabilities of the company are concerned they are showing increasing trend and same is the case with the current and long term liabilities but the increasing trend in assets is lower than the increasing trend in liabilities which is not a good position for the bank as shown in the balance sheet.
In generation of funds of DIBPL, the most important source is mark-up income. The three earning revenues are the mark-up income, non mark-up income and other income (Appendix IV). In balance sheet the most important item is earning assets. The bank has strong earning assets like advances, investments, and lending to financial institutions has major percentage of assets of the bank. In liability and equity analysis the borrowing from financial institutions and deposits have major portion and reserves and share capital has major portion in equity.
Analysis of balance sheet shows increase or decrease in each item as a percentage of asset, means that assets are chosen as key figure. Chapter 3 Marketing Analysis Dubai Islamic Bank Pakistan Limited is growing rapidly in Pakistan. This shows the success of its various strategies. Various factors of marketing for DIBPL are: • Target Market • Marketing Mix • Positioning 3. 1) Target Market: The DIBPL is mainly focusing on corporate sector. Small and medium sized companies are its main customers.
The reason behind focusing on corporate sector is that a single company can deposit a large sum of money that is difficult to achieve by focusing on individual customers. It does not mean that DIBPL is lacking the other side of the picture. It has also got individual customers. Corporate sector constitute 80% of all the deposits of the bank. This is the reason DIBPL is focusing on corporate sector. Due to this reason we see no advertisement of DIBPL in print and electronic media. Target marketing is the basic step for rest of the strategies being developed. 3. 2) Marketing Mix:
Marketing Mix includes four P’s of marketing. These are: • Product • Price • Place • Promotion Products and services provided by DIBPL have been discussed in first chapter of this report. All the products and services offered by DIBPL are purely Islamic. No other bank offers such services to the customers. Price means that service charges of the bank. Charges are determined by the Schedule of Charges every year. Bank provides quality services at very competitive charges. For example there are charges for the renewal of ATM card, renewal of cheque books and cash withdrawals. The main factor to discuss is the promotion.
Promotion strategies consist of promotion mix. The promotion mix includes: • Advertising • Publicity • Sales Promotion • Personal Selling Advertising is paid and non personal communication of companies’ message to target customers. DIBPL has no focus of advertising. This is also a weakness of DIBPL, because its customers are spending a lot of funds on advertising. Competitors are taking full advantage of it. As DIBPL is offering products and services to individual customers, so they need to communicate their products and services with people through print and electronic media.
DIBPL has very effective personal selling teams. Their Financial consultants and Relationship managers convince corporate customers to an account in the bank. This is competitive advantage of DIBPL. This is the reason due to which DIBPL stands good in the market. Even without advertising and other communication methods DIBPL manages to gain a good market share. 3. 3) Positioning: Positioning is the customers’ perception about the company’s products and services. DIBPL is positioning itself as a prestigious and quality services provider in the country. DIBPL believes that customer is the key to success of business.
Customer Relationship department and Relationship managers are responsible for giving customer a sense of prestige at the bank. Chapter 4 My Experience and Contribution I have done six week internship in DIBPL Bank satellite town branch, Murree road, Rawalpindi. During my internship I have worked in various departments of bank. The reason for selecting DIBPL was that it is among those few banks which performed remarkably well in less time and grabbed the market share with their products, services and different banking experience. The bank encouraged young minds to come and work with them.
The working environment of the bank is good and appreciating as compared to other banks in the industry. It is one of the very few organizations that give a safe working environment for female and provide them equal opportunities for growth in comparison to male employees. The employees of the bank are really cooperative and help a lot in providing knowledge and expertise to new entrants and internees. I have worked in various departments and gained knowledge not only about DIBPL but also about rules and prudential’s of State Bank of Pakistan and competitor banks.
Another reason for selecting DIBPL was that they keep a complete record of the performance of the internees and offer job to those who perform well after the completion of their degrees. I have completed my internship in a total duration of six weeks and department that I worked during this time are as follows: 1- Account Opening 2- CRO 3- Relationship Department 4. 1) Account Opening: Account Opening department is one of the departments that come under the retail/general banking facilities provided by DIBPL.
If a customer loses his cheque book, then the customer will have to come to the bank and firstly report the loss and then stop the payment, by telling the series of cheques he has lost. By stopping payment, the customer is guaranteed that no payment is made from their account. The process for stopping payment, after the customer tells that he has lost his cheque book is that he fills a “Form B”, which is same as a cheque book requisition form and an indemnity form, stating no responsibility on behalf of the bank if any illegal payment is made before the time of announcing a cheque book lost.
When a customer comes to open his account, he has to fill a form with the bank. As a part of my internship I had to fill these forms by customers and then use the appropriate bank stamps to complete these forms. Also as a part of the relationship form, I also had to do a “ Verisys” a verification system started by NADRA on the CNIC of the new account opener. A “Verisys” tells, that whether the candidate is a Pakistani citizen or not and all the information written in account opening form are true or not by matching the information to the database of NADRA.
Working in this department helped me a lot in learning new things like personal verification, dealing with clients and database management system. 4. 2) CRO: Under CRO department I had to deal with customers on front end and handle their queries regarding the account opening, services and meetings with bank relationship managers. A bank statement tells the whole activity of a bank account over a period of a time. Customers often come and want their bank statements and have to fill a form, relating to the time period for which the bank statement is needed.
As a part of my internship, I had to facilitate the customer to fill the ‘Bank Statement Forms’ and produce the statement through the bank software and print it as well. Often customer wants to know their accounts balance over phone and thus I had to tell them their account balances using the bank’s information system. Other work done by CRO is the general client dealing and furnishes their queries in bank and on the phone. The after account opening process is completed by this department as well as the reactivating of accounts and guiding the clients during applying for different services of bank.
In all above mentioned activities I was acting as an assistant to CRO and carrying the activities. 4. 3) Relationship Department: The Relationship Department is present in every branch which is assigned to bring the business for the bank i. e. the accounts of corporate sector as well as the business people. The branch set the target for them and they have to achieve it. The targets are set for six months. In this I had to assist the relationship managers in targeting the clients and then accordingly take the appointment time for meeting and working for preparing understanding the benefits by affiliation with DIBPL.
Working in DIBPL was a unique experience, many skills were used there and many skills were developed. As I worked in CRO department, it enhanced my communication and negotiation skills. Chapter 5 Summary and Recommendations I spent six weeks of my internship in DIBPL satellite Town, Rawalpindi. During these six weeks, I felt myself to be a part of bank. Even, this was my first experience of working in a bank but I learnt a lot from this experience. In first chapter of this report, the history of DIBPL and its introduction is provided. The products and services provided by bank are also discussed in the first chapter.
Various departments of the bank were also discussed in detail. In the second chapter of this report, the complete analysis of the bank has been provided. SWOT analysis highlighted the bank’s strengths, weaknesses, opportunities and threats. Competitors’ analysis has provided the overall picture of competitive environment. The financial analysis has described the financial position of the bank. In the third chapter of this report, various marketing strategies opted by the bank has been analyzed in detail. This chapter highlights the advertising and positioning strategies of the bank.
Chapter four is about my personal experience and contribution. Personal experience is an exact of what I have learnt during my internship. At the end the report has been concluded with summary and recommendations in the final chapter. Recommendations Based on my observation regarding the operations and policies of DIBPL, I have tried to give recommendations for further improvement. 1) First of all, I would like to suggest that the bank must pursue a very aggressive marketing and advertising strategy so that it can create awareness in the general public about its Islamic products and services. ) Secondly there is a need for creating satisfaction among employees. They do not feel any attachment to the organization. There is a requirement for building up their loyalties so that the bank can curtail the dissatisfaction and turnover among employees. 3) The personnel in the bank should not be overstressed with workload. The workload is of a destructive level. At that level of load the employees loose all the comfort in their work and remain tense and frustrated. 4) Job training is very important aspect that DIBPL is lacking in. New employees are recruited directly without any prior training or orientation.
The result is that they do not understand the organizational structure and culture and become frustrated in their start. This reduces their productivity and efficiency. If such a training program is started, then new employees would feel more comfortable and adapt easily to the environment. 5) DIBPL should continue to expand its business, by increasing its deposits portfolio through aggressive market penetration strategies. 6) DIBPL needs to improve its website. More information relating to financial performance of the bank should be available on the website. 7) Management should distribute work equally among the different employees. ) Related jobs should be assigned to the employees so that they can work more efficiently. References Van Horne, J. C. , & Wachowicz, J. M. (2008). Fundamentals of Financial Management. (13th ed. ). Griffin, R. W. , & Ebert, R. J. (1998). Business. (5th ed. ). Upper Saddle River: New Jersey Kotler, P. , & Armstrong, G. (2007). Principles of Marketing. (12th ed. ). Cravens, D. W. , & Piercy, N. F. (2008). Strategic Marketing. (9th ed. ). Lynch, R. (2006). Corporate Strategy. (4th ed. ). Shim, J. K. & Siegel, J. G. (2003). Managerial Finance. http://www. dibpak. com http://www. dibpak. com/products