RISK MANAGEMENT IN ISLAMIC BANKING

1
(No Transcript)
2
RISK MANAGEMENT IN ISLAMIC BANKING

• Presentation by
• MAHMOOD SHAFQAT
• Senior Joint Director
• Islamic Banking Department
• September 01, 2008
• The views expressed in this presentation are
  those of the author and do not necessarily
  represent State Bank of Pakistan.

3
Outline

• Definition and Introduction to Risk Management
• Is Risk Management allowed under Shariah
• Risks faced by Banks
• Unique Risks faced by Islamic Banks
• Risk mitigation tools
• Regulatory Framework for Risk Management in
  Pakistan
• SBP Guidelines on Risk Management in IBIs
• IFSB Standard on Capital Adequacy

4
RisksBasic Concept

• Risk
• existence of uncertainty about future outcomes
• difference between expected and actual result
• Uncertainty classified as general and specific
• General ignorance of any potential outcome
• Specific when objective/subjective probabilities
  can be assigned to potential outcomesthis is
  usually referred to as risk.

5
Definition of Financial Risk

• Financial risk in a banking organization is
  possibility that the outcome of an action or
  event could bring up adverse impacts.
• Such outcomes could either result in a direct
  loss of earnings / capital or may result in
  imposition of constraints on banks ability to
  meet its business objectives.

6
RISK MANAGEMENT

• Risk Management involves identification,
  measurement, monitoring, reporting and
  controlling risks to ensure that
• The individuals who take or manage risks clearly
  understand it.
• The organizations Risk exposure is within the
  limits established by Board of Directors.
• Risk taking Decisions are in line with the
  business strategy and objectives set by BOD.
• The expected payoffs compensate for the risks
  taken
• Risk taking decisions are explicit and clear.
• Sufficient capital as a buffer is available to
  take risk

7
Risk Management activities

• Risk management activities take place at
• Strategic level by senior management and BOD
• Definition of risks, institutions risk appetite,
  formulating strategy and policies for managing
  risks and establish adequate systems and controls
  to ensure that overall risk remain within
  acceptable level and the reward compensate for
  the risk taken.
• Macro Level within a business area or across
  business lines
• Risk reviews by middle management
• Micro Level where risks are actually created
• Activities performed by individuals who take risk
  on organizations behalf such as front office and
  loan origination functions. Confined to following
  operational procedures and guidelines set by
  management.

8
Risk management process

• Identification
• Measurement
• Monitoring
• Reporting
• Mitigation and control

9

• To put it simply and directly,
• if the bosses do not or cannot understand both
  the risks and rewards in their products,
• their firm should not be in the business. -
• William J. McDonough, President, Federal Reserve
  Bank of New York

10
Shariah Perspective

• No Risk No Reward principle (Al Ribh Bi Daman)
• So No Risk Management?
• Measures taken by Hazrat Yousuf (AS) for drought
  (Ahsan ul Qasas)
• Do not give your Amwal to Sufahaa
• Writing of contracts whether spot or deferred
  (Legal risk, Documentation risk, etc)
• Maqasid-e-Shariah
• Protection of Izat, Jaan, Aql, Maal, Nasl

11
RISKS FACED BY BANKS AND THEIR APPLICATION ON
ISLAMIC BANKING
12
Risk Dimensions
Credit
13
ISLAMIC BANKING LESS RISKY?

• Islamic Banking is safer as it is not based on
  INTEREST?
• Depositors are liable to share losses, therefore
  solvency risk is mitigated?

14
Major Types of Risks in IB

• Credit Risk
• Attributed to delayed, deferred, and default in
  payments by counterparties. Covers profit sharing
  contracts (Mudaraba and Musharaka), receivables
  and lease (Murabaha, DM and Ijara, Salam,
  Istisna), and covers different stages of a
  contract
• Market Risk
• Adverse movements in interest rates, commodity
  prices and FX rates. Commodity risk in Murabaha,
  Ijara, Salam
• Equity Risk
• Adverse changes in market value (and liquidity)
  of equity held for investment purposes. Covers
  all equity instruments including Mudaraba and
  Musharaka

15
Major Types of Risks in IB

• Liquidity Risk
• Adverse cash flows in situations arising mainly
  out of changing market risk exposures, credit
  risk exposures and operational risk exposures.
• Rate of Return Risk
• Changes in account holders expectations of the
  return on investment. Also related to
  fluctuations in returns due to changes in
  underlying factors of the contract.
• Operational Risk
• Inadequacy of failed processes, people and
  systems. Also includes Shariah non-compliance
  Risk
• Legal Risk
• Inadequate legal framework, conflict of
  conventional and Islamic laws and conflict
  between Shariah rulings and legal decisions

16
Credit Risk Mitigating Tools

• Pledge of assets as collateral
• Inventories, Shares, Sukuk, Units, etc.
• Third party Guarantee
• Personal Guarantee
• Promise
• Charge on deposits and assets
• Takaful
• Hamish Jiddiya
• Urbun
• Khiyar / Option
• Parallel contract, if permissible

17
Regulatory Framework

• Risk Management
• Guidelines on Risk Management - BSD Circular No.
  7 dt. Aug. 15, 2003 
• Guidelines on Internal Credit Risk Rating Systems
  BSD Circular No. 8 dt. Oct. 29, 2007
• Risk Management Guidelines for IBIs IBD
  Circular No. 1 dt. Jan. 2, 2008.
• ICAAP Guidelines - BSD Circular 17 of 2008
• Stress Testing
• Guidelines on Stress Testing - BSD Circular No. 5
  dt. Oct. 27, 2005 
• Internal Controls
• Guidelines on Internal Controls - BSD  Circular
  No . 7 dt. May 27, 2004 and BSD Circular No. 1
  dt. Jan.14, 2006
• Policy Framework in Banks/DFIs - BSD Circular 3
  of 2007  

18
SBP RM Guidelines for IBIs

• 15 Guiding Principles
• Divided into
• General (1 Principle)
• Credit risk (4 Principles)
• Equity investment risk( 3 Principles)
• Market risk (1 Principle)
• Liquidity risk (2 Principles)
• Rate of return risk ( 2 Principles)
• Operational risk (2 Principles)
• IBIs are also exposed to reputational risk
  arising from failures in governance, business
  strategy and process. Negative publicity about
  their business practices, particularly relating
  to Shariah non-compliance in their products and
  services, could have an impact upon their market
  position, profitability and liquidity.

19
Guiding Principles on RM

• These principles are not radically different from
  those applicable to conventional banks
• However, these are some fundamental differences
• Emphasis on Shariah compliance
• 6 out of 15 principles make explicit reference to
  Shariah rules

20
1. General Requirement

• Principle 1.0 IBIs shall have in place a
  comprehensive risk management and reporting
  process, including appropriate board and senior
  management oversight, to identify, measure,
  monitor, report and control relevant categories
  of risks. The process shall take into account
  appropriate steps to comply with Shariah rules
  and principles and to ensure the adequacy of
  relevant risk reporting to the supervisory
  authority.

21
1. General Requirement

• Board of directors (BOD) and senior management
  oversight
• approve the risk management objectives,
  strategies, policies and procedures
• approvals shall be communicated to all levels
• ensure the existence of an effective risk
  management structure
• Shariah Advisor to oversee that the IBIs
  products and activities are Shariah compliant

22
1. General Requirement

• Board of directors (BOD) and senior management
  oversight
• approve limits on aggregate financing and
  investment exposures
• review the effectiveness of the risk management
  activities
• Senior management shall execute the strategic
  direction and set clear lines of authority and
  responsibility
• Independence of risk management function from
  risk taking activities

23
1. General Requirement

• Risk management process
• sound process for executing all elements of risk
  management, including risk identification,
  measurement, mitigation, monitoring, reporting
  and control
• adequate system of controls with appropriate
  checks and balances
• (a) comply with the Shariah rules and
  principles,
• (b) comply with applicable regulatory and
  internal policies and procedures and
• (c) take into account the integrity of risk
  management processes
• quality and timeliness of risk reporting
  available to regulatory authorities
• appropriate and timely disclosure of information
  to depositors

24
1. General Requirement

• Application of Emergency and Contingency Plan
• Integration of Risk Management
• Risk Measurement and use of models
• Utilization of funds
• Role of Finance Administration Department
• Management Information System for board or senior
  management committee
• Human Resource Training and development

25
2. Credit Risk

• Principle 2.1 IBIs shall have in place a
  strategy for financing, using various instruments
  in compliance with Shariah, whereby they
  recognize the potential credit exposures that may
  arise at different stages of the various
  financing agreements.

26
2. Credit Risk

• Principle 2.2 IBIs shall carry out a due
  diligence review in respect of counterparties
  prior to deciding on the choice of an appropriate
  Islamic financing instrument.
• Principle 2.3 IBIs shall have in place
  appropriate methodologies for measuring and
  reporting the credit risk exposures arising under
  each Islamic financing instrument.

27
2. Credit Risk

• Principle 2.4 IBIs shall have in place
  Shariah-compliant credit risk mitigating
  techniques appropriate for each Islamic financing
  instrument.

28
2. Credit risk

• These principles apply to
• Murabaha, Salam, ijara and Istisna contracts
• Mudaraba and Musharaka
• Sukuk
• For example, for working capital financing,
  Salam and Mudaraba contracts could be used
• In case of Salam, the bank enters into a parallel
  Salam contract with a third party
• What factors may effect the counterpartys
  ability to repay

29
2. Credit risk

• The commodity price
• Dont use commodities with high price volatility
• A list of all types of applicable and approved
  transaction and financing
• The Islamic banks should ensure that adequate
  systems and resources are available to implement
  this strategy
• In case of using Mudaraba contract as a working
  capital tool
• The choices of Mudarib company should be made
  with care

30
2. Credit risk

• The bank must have close links with the company -
  Shariah implications
• Choose an appropriate trading activity for
  financing
• Guidelines on a realistic review of expected
  future cash flow

31
2. Credit risk

• Transformation of risk should be taken into
  account while devising a sound risk management
  strategy
• For example, in Murabaha contracts, the risk gets
  transformed from market risk to credit risk
• In Mudaraba and Musharaka contracts, equity
  investment gets transformed to debt in case of
  proven negligence for misconduct on part of the
  Mudarib or Musharaka partners
• The role of promises must be scrutinized and
  recognized in the complex structures

32
2. Credit risk

• Clearly define risk mitigating techniques
  including but not limited to
• Methodology for setting Mark-up rates according
  to the risk-rating of the counterparties
• Permissible and enforceable collaterals and
  guarantees
• Clear documentation as to whether or not purchase
  orders are cancelable
• Clear procedure for taking a/c of governing laws
• Always try to buy the asset-to-be- financed on
  sale-or-return basis

33
2. Credit risk

• IBIs shall assess credit risk in a holistic
  manner and ensure that credit risk management
  forms a part of an integrated
• For example, in a Salam contract, changes in
  market risk factors such as commodity prices, as
  well as the external environment (for example,
  bad weather) become key determinants affecting
  the likelihood of default.

34
2. Credit Risk

• The IBIs must have
• an appropriate credit strategy, including pricing
  and tolerance for undertaking various credit
  risks
• a risk management structure with effective
  oversight of credit risk management
• credit policies and operational procedures
  including credit criteria and credit review
  processes, acceptable forms of risk mitigation,
  and limit setting

35
2. Credit Risk

• an appropriate measurement and careful analysis
  of exposures, including market- and
  liquidity-sensitive exposures and
• a system to
• monitor the condition of ongoing individual
  credits to ensure the financings are made in
  accordance with the IBIs policies and procedures,
  
• manage problem credit situations according to an
  established remedial process and to determine
  adequate provisions to be made for such losses.

36
3. Equity investment risk

• Equity investment risk may be defined as the risk
  arising from entering into a partnership for the
  purpose of undertaking or participating in a
  particular financing or general purpose activity
  as described in the contract, and in which the
  bank shares in the business risk
• Market risk
• Liquidity risk
• Credit risk
• Other risks
• Capital impairment risk

37
3. Equity Investment Risk

• Principle 3.1 IBIs shall have in place
  appropriate strategies, risk management and
  reporting processes in respect of the risk
  characteristics of equity investments, including
  Mudarabah and Musharakah investments.

38
3. Equity Investment Risk

• Principle 3.2 IBIs shall ensure that their
  valuation methodologies are appropriate and
  consistent, and shall assess the potential
  impacts of their methods on profit calculations
  and allocations. The methods shall be mutually
  agreed between the IBIs and the Mudarib and/or
  Musharakah partners.

39
3. Equity Investment Risk

• Principle 3.3 IBIs shall define and establish
  the exit strategies in respect of their equity
  investment activities, including extension and
  redemption conditions for Mudarabah and
  Musharakah investments, subject to the approval
  of the institutions Shariah Advisor.

40
3. Equity Investment Risk

• Risk mitigation
• Define and set the objectives of, and criteria
  for, investment using profit sharing instruments
• Monitoring
• Evaluation of Sharia compliance, holding of
  periodical meeting with partners and proper
  recordkeeping of these meetings
• Monitoring of transformation of risks at various
  stages of investment lifecycle
• Monitoring of factors affecting the expected
  volume and timing of cash flows

41
3. Equity Investment Risk

• Valuation
• Appropriate valuation methods profit calculation
  and allocation
• Assessment and measurement of potential
  manipulation of reported results leading to
  overstatements or understatements of partnership
  earnings
• Independent audit and valuations
• Appropriate methods for the treatment of retained
  profits
• Criteria for Exit strategies

42
4. Market Risk

• Principle 4.1 IBIs shall have in place an
  appropriate framework for market risk management
  (including reporting) in respect of all assets
  held, including those that do not have a ready
  market and/or are exposed to high price
  volatility.

43
4. Market Risk

• The risk that arises from fluctuations in values
  of tradable, marketable or leaseable assets
  (including Sukuk) and in off- balance sheet
  individual portfolios
• The risks relate to the current and future
  volatility of market values of
• Salam based assets (due to commodity prices)
• Sukuk
• Murabaha assets( purchased to be delivered)
• Market risk exposures may occur at certain times
  or throughout the contract

44
4. Market Risk

• In operating Ijarah, a lessor is exposed to
  market risk on the residual value of the leased
  asset at the term of the lease or if the lessee
  terminates the lease earlier (by defaulting),
  during the contract.
• In Ijarah Muntahia Bittamleek, a lessor is
  exposed to market risk on the carrying value of
  the leased asset (as collateral) in the event
  that the lessee defaults on the lease
  obligations.
• In Salam, IBIs are exposed to commodity price
  fluctuations on a long position after entering
  into a contract and while holding the subject
  matter until it is disposed of.
• In the case of parallel Salam, there is also the
  risk that a failure of delivery of the subject
  matter would leave the IBIs exposed to commodity
  price risk as a result of the need to purchase a
  similar asset in the spot market in order to
  honour the parallel Salam contract.

45
4. Market Risk

• IBIs shall establish a sound and comprehensive
  market risk management process and information
  system, which (among others) comprise
• a conceptual framework to assist in identifying
  underlying market risks
• guidelines governing risk taking activities in
  different portfolios of depositors and their
  market risk limits
• appropriate frameworks for pricing, valuation and
  income recognition and
• a strong MIS for controlling, monitoring and
  reporting market risk exposure and performance
  to appropriate levels of senior management.

46
4. Market Risk

• Market risk is closely related to other forms of
  risks, and an overall measure of it can be
  calculated with the help of an appropriate VAR
  model
• Islamic banks then should ensure that adequate
  capital is held against the market risk

47
5. Liquidity Risk

• Principle 5.1 IBIs shall have in place a
  liquidity management framework (including
  reporting) taking into account separately and on
  an overall basis their liquidity exposures in
  respect of each category of current accounts,
  unrestricted and restricted investment accounts.
• Principle 5.2 IBIs shall undertake liquidity
  risk commensurate with their ability to have
  sufficient recourse to Shariah-compliant funds
  to mitigate such risk.

48
5. Liquidity Risk

• Two major types of fund providers
• current account holders and
• PLS Deposit holders
• PLS Deposit holders do not share in the risks on
  assets financed by current accounts, which are
  borne by shareholders alone
• As fiduciary agents, the IBIs are concerned with
  matching their investment policies with PLS
  Deposit holders and shareholders risk appetites

49
5. Liquidity Risk

• Linked with displaced commercial and Shariah
  compliance risks
• Islamic banks must maintain adequate liquidity to
  meet their obligations at all times
• Strategy for managing liquidity involving
  effective BOD and senior management oversight
• A framework for developing and implementing sound
  processes for measuring and monitoring liquidity
• Adequate systems in place for monitoring and
  reporting liquidity exposures on a periodic basis

50
5. Liquidity Risk

• Adequate funding capacity, with particular
  reference to the willingness and ability of
  shareholders to provide additional capital when
  necessary
• Liquidity crisis management, fixed asset
  realization and sale and leaseback arrangements
  etc.

51
5. Liquidity Risk

• Risk mitigation
• - Diversity sources of funds
• - Reduce concentration of funding base
• - Rely on marketable assets
• Identity any future shortfalls in liquidity by
  constructing maturity ladders
• Known cash flows
• Murabaha, Ijara, IMB and diminishing Musharaka
  receivables

52
5. Liquidity Risk

• Conditional but predictable cash flows
• Salam and Istisna receivables
• Conditional and unpredictable cash flows
• Musharaka investments
• Periodic cash flow analysis under different
  scenarios
• A normal operating environment (e.g., a steady
  state condition)
• Adverse circumstances (e.g., non-linear events
  and chaotic conditions)

53
5. Liquidity Risk

• establish the maximum amounts of cumulative
  liquidity mismatches they consider acceptable
• Liquidation procedures must be incorporated in
  the investment contracts
• Liquidity contingency plans addressing various
  stages of liquidity crisis

54
6. Rate of Return Risk

• Principle 6.1 IBIs shall establish a
  comprehensive risk management and reporting
  process to assess the potential impacts of market
  factors affecting rates of return on assets in
  comparison with the expected rates of return for
  PLS Deposit holders.
• Principle 6.2 IBIs shall have in place an
  appropriate framework for managing displaced
  commercial risk, where applicable.

55
6. Rate of Return Risk

• An increase in benchmark rates may result in PLS
  depositors having expectations of a higher rate
  of return
• The actual return on assets may be under
  performing as compared to the competitors rate
  of returns
• Displace commercial risk
• Profit Equalization Reserve
• Investment Risk Reserve

56
7. Operational Risk

• Principle 7.1 IBIs shall have in place adequate
  systems and controls, including Shariah Advisor,
  to ensure compliance with Shariah rules and
  principles.

57
7. Operational Risk

• Principle 7.2 IBIs shall have in place
  appropriate mechanisms to safeguard the interests
  of all fund providers. Where PLS deposit holders
  funds are commingled with the IBIs own funds, the
  IBIs shall ensure that the bases for asset,
  revenue, expense and profit allocations are
  established, applied and reported in a manner
  consistent with the IBIs fiduciary
  responsibilities.

58
7. Operational Risk

• Shariah compliance risk
• - The risk that arises form Islamic banks
  failure to comply with the Shariah rules
  principles determined by the Shariah Advisor or
  the relevant body in the jurisdiction in which
  Islamic banks operate
• Fiduciary risks
• - The risk that arises from the Islamic banks
  failure to perform in accordance with explicit
  and implicit standards applicable to their
  fiduciary responsibilities

59
7. Operational Risk

• IBIs shall establish and implement a clear and
  formal policy for undertaking their different and
  potentially conflicting roles in respect of
  managing different types of investment accounts.
• IBIs shall adequately disclose information on a
  timely basis to their PLS deposit holders and the
  markets in order to provide a reliable basis for
  assessing their risk profiles and investment
  performance.

60
ROLE OF SUPERVISORY AUTHORITY

• adequate understanding on the wide array of risks
  and satisfy itself that the IBIs have in place an
  adequate risk management and reporting process
• Develop and utilise prudential regulations and
  requirements to control these risks

61
ROLE OF SUPERVISORY AUTHORITY

• Credit Risk
• maintain a detailed description of each financing
  instrument used by the IBIs in their jurisdiction
  and the risk exposures to which each instrument
  gives rise
• may decide to develop Shariah guidelines or
  minimum documentations in respect of agreements
• adequacy of the policies and procedures to be
  implemented by the IBIs to mitigate risks are
  subject to review by the supervisory authority in
  compliance with Shariah

62
ROLE OF SUPERVISORY AUTHORITY

• Equity Investment Risk
• satisfy itself that adequate policies and
  procedures are in place for equity investment
  risk management
• ensure that the IBIs have sufficient capital when
  engaging in equity investment activities
• may develop regulatory guidelines for measuring,
  managing and reporting the risk exposures when
  dealing with non-performance financing and
  providing provisions

63
ROLE OF SUPERVISORY AUTHORITY

• Market Risk
• satisfy itself on the adequacy of IBIs internal
  systems and controls and internal limits set by
  the IBIs on their market risk management in
  relation to the activities undertaken.
• Supervisory authorities should require IBIs in
  their jurisdictions to develop guidelines for
  acceptable valuation techniques where direct
  market prices are not available, and should
  approve such guidelines. Alternatively, the
  supervisory authorities may themselves develop
  such guidelines.

64
ROLE OF SUPERVISORY AUTHORITY

• Liquidity Risk
• satisfy itself that the IBIs have adequate
  liquidity policies, systems and controls in place
  to manage their liquidity
• may establish appropriate minimum levels of
  liquidity for each category
• central bank in its capacity as lender of last
  resort may provide Shariah compatible mechanisms
  for liquidity arrangements to IBIs as per
  stipulated regulations before the IBIs can resort
  to seeking funds

65
ROLE OF SUPERVISORY AUTHORITY

• Rate of Return Risk
• assess the capacity of the IBIs to manage the
  rate of return risk may establish appropriate
  minimum levels of liquidity for each category
• Where the supervisory authority may have a
  policy of stating an expected rate of return for
  unrestricted IAH, the supervisory authority shall
  establish a framework within which this is to be
  undertaken by the IBIs operating in its
  jurisdiction

66
ROLE OF SUPERVISORY AUTHORITY Rate of Return Risk

• The ROR framework may include amongst others,
  methods, applicable periods and recognisable
  income and expenses, and other calculation bases
  relating to the use of funds. This framework
  shall assist the supervisory authority to assess
  the efficiency of IBIs in terms of their
  profitability and prudent management.

67
ROLE OF SUPERVISORY AUTHORITY

• Operational Risk
• satisfy itself that IBIs have in place a
  comprehensive and sound framework for developing
  and implementing a prudent control environment
  for the management of operational risks
• IBIs have adequate Shariah compliance mechanisms
  in place
• well-defined and adequately qualified and staffed
  organisational structure
• clear lines of authority and accountability
• policies and procedures for approval of products
  and activities

68
ROLE OF SUPERVISORY AUTHORITY

• Operational Risk
• prescribe formal guidance for the IBIs to ensure
  they fulfil their fiduciary duties towards their
  IAH
• applicable auditing standards relevant to IBIs
  are being implemented correctly in respect of the
  assessment of the appropriateness of allocations,
  distributions and reporting of profits to IAH
• The supervisory authority may require IBIs to
  have an independent and regular review of
  Shariah compliance in this regard.

69
Risk Measurement

• Risk measurement methods
• - Traditional
• GAP analysis
• Duration analysis
• Statistical analysis
• Scenario analysis
• Modern portfolio theory
• Variation from the mean
• VAR

70
TEN RULES TO RISK MANAGEMENT

• There is no return without risks
• Rewards go to those who take risks
• Be transparent
• Risk should be fully understood
• Seek experience
• Risk is measured and managed by people, not by
  mathematical models
• Know what you dont know
• Question the assumptions made
• Communicate
• Risk should be discussed openly

71
TEN RULES TO RISK MANAGEMENT

• Diversify-avoid concentration
• Multiple risks will produce more consistent
  rewards
• Show discipline
• A consistent and rigorous approach will beat a
  constantly changing strategy
• Use common sense
• It is better to be approximately right, than to
  be precisely wrong
• Return is only half of the equation
• Decisions should be made only after considering
  the risks and returns of the possibilities
• Oversight must be enterprise-wide
• Risks cannot be managed in isolation

72
IFSB Capital Adequacy Standard

• Overview
• Largely based on the Basel approach, with
  necessary modification and adaptation to cater
  for specific nature and characteristics of
  Shariah compliant products and services
• Uses Risk weights derived from those proposed in
  Basel II because of lack of historical data to
  modify risk weights
• For Credit Risk - Standardized approach
• Market Risk - 1996 Market Ris Amendment
• Operational Risk - Basic Indicator approach
• CAS is structured in a Matrix format to cater for
  transformation of risk at different stages of
  contract
• Treatment of PSIA and assets financed by PSIA in
  CAR
• Adoption after Impact Study by SBP

73
A Word of Caution

• Risk Management of your life is important than
  everything.
• Would you ever think about it.
• Various risks are related with our body and Soul.
  Some of them could harm a lot and some less.
• Kindly Think about it .

74
For Comments and Suggestions please
contact Mahmood Shafqat Senior Joint
Director Islamic Banking Department State
Bank of Pakistan I.I. Chundrigar Road,
KarachiPh 92-21-9212509, 2453741Fax
92-21-9212472E-mail mahmood.shafqat_at_sbp.org.pk
75
THANK YOU

• MAY ALLAH THE ALMIGHTY SHOW US THE RIGHT PATH,
• THE PATH OF HIS LOVED ONES (AAMEEN)