A
A-1
A-2
A-3
A-4
A-5
Identification & determination of pools of Initially from the general pool and subsequently from
assets
already created specific pools
What is the basis of pool management’s Basically Musharakah based on a structure designed in
mode(s) i.e. Mudaraba, Musharakah, Mudaraba such a manner that the Bank being “Mudarib” represents
itself as “Shareek/partner” on behalf of its “Rabb-ul-Maal”
– Musharakah, Wakala or any hybrid mode?
while dealing with other financial Institutions. On the other
hand Bank’s equity (including current account deposits)
used to finance assets represent bank’s contribution in the
Musharakah with the deposits of corporate customers/high
net worth individuals
,
What type(s) of Pools is being maintained i.e. There are multiple pools specially to avoid Bai inah (buy
whether there is a single pool or multiple pools? back) to fulfill customers and FIs demand for specific returns
Do you have separate / same policy for local & Since there are less avenues for creation of assets funded
by foreign currencies thus foreign currency deposits based
foreign currency deposits.
specific pools are normally created through FE 25
Murabahas and FCY deposits monetary value converted into
PKR is used to fulfill Shari’ah requirement of at least 20%
illiquid assets in the specific pool through pooling PKR
Ijarah/DM
What are the maturities / tenors of different The maturities of pools may depended upon the maturities
pools? What is the treatment of profit accrued of the deposits/inter-bank deals for which specific pools are
on ‘payment-on-maturity” against a deposit and created or may be more than the maturities of the
periodical payment of profits against a deposit? deposits/inter-bank deals. Earning assets are selected with
the higher than expected returns to make profit payments
to the deposits. Accordingly, assets having periodical profits
payments are used for making profits payments to deposits
which require matching periodical profits payments
Does bank treat current A/cs and other A/cs e.g. Yes. Current accounts deposits are treated as bank’s equity,
margin A/cs as part of its own investment/ while creating specific pools.
equity in the pool. If not what treatment in the
pool.
A
A-6
A-7
A-8
Identification & determination of pools of Initially from the general pool and subsequently from
assets
already created specific pools
What is the policy for giving priority to Bank’s It is tried to maintain return on bank’s equity similar to
general pool. However, probability exists to bear nonfunds /investment over depositor’s funds
performing assets loss and abnormal expenses by the
bank’s equity (without disclosing this fact as contractual
obligation) to maintain liability side customers confidence
upon bank performance
In case of multiple pools, what is the criteria for The assets are selected for any new pool on the basis of
developing a new pool and what are the tenor of transaction and the profit rates desired by the
authorization controls and approval processes depositor/FI. Back Office Treasury/Transactional Operations
Department approves the new pool which is developed
for developing a new pool.
with the help of Financing Control and Products
Development teams.
How it is ensured that a new pool is created Back Office Treasury/Transactional Operations Department
before accepting a deposit and before allocating is informed by the liability sales team/Treasury Division
regarding the fresh deposits deals to quickly create the
the assets?
desired pool
B
Pool composition & allocation of assets
B-1
Briefly elaborate avenues of Assets deployment
/ uses of funds for each pool
What is Ratio of illiquid assets prescribed for
each pool. Pls. give brief description, as to how
it is ensured that the ratio of illiquid assets is
maintained..
What controls are in place for Tagging of assets
to different pools( in case of multiple pools)
B-2
B-3
B-4
B-5
B-6
What is the mechanism of movement of
allocated/tagged assets from general pool to
specific pool & vice versa?
What is the treatment of any expenses and
losses related to assets of a specific pool,
particularly in case of non-performing assets?
How the bank ensures the there is no buy-back
of assets between / amongst pools?
Mainly FIs, corporate customers and high net worth
individuals.
At least 20% illiquid assets.
Pool management is system based. Each asset of different
pools is given a separate distinctive number, based on the
date of asset creation and its maturity. There are flags of
different colors to identify different pools along with their
date of creation and date of maturity. Each pool is given a
separate distinctive number.
General pool assets are sold/transferred to different pools
based on profit yield of each asset to make profit payments
based on return desired by respective Rabb ul Maal
In each pool bank’s Equity (including current accounts
deposits) is mixed in such a manner that with out
contractual obligation it could absorb the loss of nonperforming assets on behalf of other Shareek of the specific
pool and to bear abnormal expenses like destruction of
asset subject to Ijarah, based on “Tabarru”. However, if
equity becomes unable to bear such kinds of
losses/expenses then the remaining loss/expanse are
distributed among the Shareek based on ratio of investment
There is a lock in system, should be introduced in the
system. Since there are many pools, therefore one asset
once sold by general pool to a specific pool is not sold back
to general pool unless one year is lapsed. The system does
not allow buy back of an asset by the general pool before
C
Identification & determination of pool’s related income
C-1
On what basis the income streams (funded & Only fund based income is shared as the earning assets are
non funded) are shared and not shared with the main source to develop specific pools.
Depositors?
How sources of income are identified and what Income of earning assets having similar or more than the
maturity date of TDRs/FI deal maturity date are selected to
is the method of its allocation?
create specific pool
What are the dates of profit calculation & Income stream attached with the earning assets are
distribution? When the computations are examined while creating a specific pool to give profits
finalized and when the returns are credited to payments to the depositors/FIs taking care that the
promised frequency of profit payments to TDRS/FIs deal
respective depositors’ accounts?
should match with the income stream of earning assets .
What is the basis of profit calculation i.e. either The basis of profit calculation on liability side is examined
minimum balance / weighted average balance in monetary value to match with the income stream of
for different types of saving deposits?
earning assets
C-2
C-3
C-4
D
Policy for Charging of Expenses to the pool
D-1
Brief description of policy for allocation of Expenses of earning assets are allocated to the relevant
expenses to different pools.
pool, based on risk and reward principle.
What type of expenses are charged (in detail)
Cost of goods, depreciation of tangible assets and
for determination and appropriation of profit or provisioning for bad debts related to the earning assets are
loss?
charged to the relevant pool
D-2
E
Profit sharing ratio & Weightages
E-1 What is the mechanism of Profit sharing Ratios
between Mudarib & Depositor, for general /
specific pool
E-2 How weightages worked out for distribution of
profit? Provide the methodology of computation
of the same.
Profit sharing ration for specific pool is based on profit yield
desired by depositor/FI followed by assignment of
weightages
Based on the profit yield of each earning asset of a specific
pool, the weightages are assigned to make sure that the
weightage average return of all earning assets of a specific
pool fulfill the requirements of profit yield desired by
depositor/FI