Online Access: www.absronline.org/journals
Management and Administrative Sciences Review
Volume 4, Issue 2
Pages: 359-373
March, 2015
e-ISSN: 2308-1368
p-ISSN: 2310-872X
The Determinants of Truncated Capitalization in Islamic Banks
of Pakistan
Salman Masood1*, and Chaudhry Abdul Rehman2
1. Ph.D Scholar, Superior University, Lahore (directorqa@superior.edu.pk)
2. Chairman, Superior University, Lahore (ceo@superior.edu.pk)
Pakistan is a Muslim country, almost 96.16 percent people of the total population are
Muslims. Only 3.84 percent of the total population are non-Muslims. Muslim market is
huge with substantial potential for Islamic Banking but Islamic banks are facing difficulties
to compete with conventional banks. Therefore, the purpose of this study is to review the
Determinants of Truncated Capitalization in Islamic Banks of Pakistan.
Ideologically speaking, Islamic financial institutions in all over the world combined into the
entire system of Muslim polity. They need strong support from all state institutions for
their survival and success to achieve their objectives. However, it did not happen in reality
when attempted to adopt, the nationwide Islamic Banking and Finance (IBF) system were
undertaken in Pakistan over the decades. The bureaucrats in the Ministry of Finance did
not show any real enthusiasm to implement the IBF system, for their own convenience and
vested interests. The SBP did not provide sufficient resources to learn and practice the
Islamic system in the banking and financial institutions of Pakistan. It purposefully
encouraged the predominant use of conventional mark-up modes in the banking and
financial sector of Pakistan. The absence of a fair and expeditious judicial system also
discouraged banking and financial institutions in Pakistan from adopting Islamic modes of
finance, which run a very high risk of default as compared with conventional lending.
The imposition of the Islamic system by force and in superficial ways is absolutely against
its own true spirit. But the government made few efforts to seek the compliance in and
participation of the people of Pakistan for the Islamization of the economy through
education, increasing awareness and moral training. Realistically speaking, the IBF system
has yet to be adopted in Pakistan under a truly Islamic and scientific approach.
Keywords: Islamic banking and finance, Awareness, Perception, Conventional banks,
Capitalization
*Corresponding author: Salman Masood,
Ph.D Scholar, Superior University, Lahore.
E-Mail: directorqa@superior.edu.pk
359
Manag. Adm. Sci. Rev.
e-ISSN: 2308-1368, p-ISSN: 2310-872X
Volume: 4, Issue: 2, Pages: 359-373
INTRODUCTION
The economy of Pakistan is based on two
important social school of thoughts i.e. Capitalistic
and Islamic (Hasan & Kamil, 2014). There are two
factors of production, capital and entrepreneur.
Capital is entitled for risk free interest and
entrepreneur is for profit. Capitalistic school of
thought says that both factors are separate and
distinctive but Islamic school of thought says that
owner invests capital for earning profits and bears
all risk of losses. Therefore in capitalistic economy
conventional banks deal in money and reward in
interest and in Islamic economy the banks deals in
money and reward in profits and risks of losses
because the riba (interest) is forbidden in such
economy (Uppal & Mangla, 2014).
One reason for such a huge difference may be that
the Islamic banking is not matured till now
because first Islamic bank i.e. Meezan Bank
Limited was inaugurated in 2003. Along with this
there may be certain others reasons that reflect
such statistics; these may be less understanding of
bankers about the Islamic banking products, i.e.
Mudaraba, Musharaka, Ijara, Takaful, Murabaha,
Bai salam, diminishing Musharaka etc. secondly
less customer awareness and understanding to
islamic banking products & principles, and
customer perception regarding interest free and
interest based banking products.
In this era of severe competition, competitive
advantage is essential for organizational survival.
Customer satisfaction and loyalty could be
considered as an important tool to maintain a
competitive advantage. An organization should
give a special attention to its service quality which
can help its organization to differentiate itself from
other organizations, and results to long term
competitive advantage (Mai, L., 2005). “Delighting
the customer” is the core message of the total
quality approach (Owlia and Aspinwall, 1996).
This study focuses on the conceptual model that
examines
the
determinants
of
truncated
capitalization in Islamic banks of Pakistan. As we
know that, Pakistan is a Muslims country.
Pakistani Government statistics in year 2008 noted
that about 96.16 percent of the population was
Muslim, 1.69 percent of the population was of
Christians and 1.40 percent of the population was
of Hindus, which means that about 3.84 percent of
the population in Pakistan was only non-Muslims.
Islamic banking is not only available to Muslims
but also for the non-Muslims. Muslim market is
huge and has substantial potential for Islamic
Banking products but Islamic banks are facing
difficulties to compete with conventional banks as
it is evident from SBP Report (2011-12), the total
Islamic bank deposits in Pakistan till June 2012
were Rs. 581.2 billion and that of conventional
bank were Rs. 5638.2 billion. Although there is an
average increase of 15% annually (SBP Report,
2011-12) in deposits of Islamic banks but still
development is not resilient. By attracting new
customers, it can enhance the long term survival of
Islamic banks. By knowing the level of awareness
of Muslims in Pakistan towards Islamic banks,
Islamic bankers could actually design or set up
different marketing campaigns based on their level
of awareness.
Pakistan is a developing country and based on
agriculture, natural resources and industrial
economy (Seth, 2014). The economy is dependent
upon the financial institutions like development
banks, schedule conventional banks of State Bank
of Pakistan and Islamic banks e.g. Agricultural
Development Bank of Pakistan (ADBP), Industrial
Developmental Bank of Pakistan (IDBP),
Investment Corporation of Pakistan (ICP), Muslim
Commercial Bank, Allied Bank of Pakistan, United
Bank Limited, and Meezan Bank Limited, Burj
Bank Limited. These financial institutions not only
contribute in credit creation but also provide short,
medium and long term loans for the development
of different important sectors of the country
(Mehta, 2014).
According to SBP Report (2011-12), the total
Islamic bank deposits in Pakistan till June 2012
were Rs. 581.2 billion and that of conventional
bank were Rs. 5638.2 billion. In Islamic Republic of
Pakistan the interest based banking have for more
capitalization as compared to interest free banking.
Significance of the Study
Research Objectives
The main objective of the study is to draft a
conceptual model that examines the determinants
of truncated capitalization in Islamic banks of
Pakistan.
360
Manag. Adm. Sci. Rev.
e-ISSN: 2308-1368, p-ISSN: 2310-872X
Volume: 4, Issue: 2, Pages: 359-373
The sub objectives are:
i. To examine the impact of general business and
socio-economic conditions on the Islamic financial
institutions development. The general business
and socio-economic conditions includes general
public and depositors, business people, foreign
and domestic
debt, legal
system, tax
system(Damayanti,
Sutrisno,
Subekti,
&
Baridwan, 2015).
ii. To examine the impact of financial sector
environment on the Islamic financial institutions
development. The financial sector environment
includes State Bank of Pakistan and role of
bankers(Ely & Calabrese, 2014).
iii. To examine the impact of Efficient Product
Marketing, Islamic Banker’s Awareness, Market
Opportunities on the Islamic financial institutions
development.
iv. To examine the impact of government machinery
on the Islamic financial institutions development.
The government machinery includes political
administration and bureaucracy.
LITERATURE REVIEW
Islamic Economics is a complete system which is
based on the concept of equality, sympathy,
kindness, unity of human beings. In reality, this
system is flawless presenting a complete system of
how to handle economic activities and does not
remain irrelevant in any other time. Historically,
the Holy Prophet (PBUH) established first Islamic
State in Medina in 7th century by checking and
participating in business activities himself.
Afterwards, pious caliphs and the followers of the
Holy Prophet (PBUH) followed the system of
Islamic Economics which was based on the tenets
of Islam. Owing to this system, well known
scholars and jurists of that time were Abu-Yusuf
(731–798 AD), Al-Shiabani (750–804 AD), IbnHazam (994–1064 AD), Tusu (1201–1274 AD), IbnTaimiya (1262–1328 AD), Ibn- Khuldun (1332–1406
AD), etc. Later on, in this present age, Islamic
Economic was developed on the pattern of Islamic
teachings due to the untiring and relentless efforts
of A Qureshi (1946), SMAhmad (1952), Uzair
(1955), Maududi (1961), Al-Arabi (1966), M N
Siddiqi (1967), Al-Sadr (1974) and Kahf (1978).
Contemporarily, the evolution and start of Islamic
Banking and finance is the result of Islamic
Economics.
In Pakistan, Islamic banking and finance
movement could not get its desired results in early
1980 due to our snail pace resulting in the shape of
not fulfilling people’s hopes and losing its core
importance. Evidently, Islamic banking system
needs approval of the teachings of Islam and
cannot work independent of religion, that is why,
for succeeding and surviving, Islam plays a vital
role in sociopolitical and economic environments
but this concept was overlooked when Islamic
banking and finance system was set to be brought
about.
This paper aims at outlining the Islamic banking
and finance institution as a cornerstone of the
entire system by banking on state institutions
(SBP) to make vital objectives, basics characteristics
and working system. Besides, the paper focused to
see the contribution of government, policymakers,
financial institutes, business people, tax and legal
and other socio-economic institutions regarding
the success or failure of our banking system.
History of Islamic Banking, Inauguration &
Development of Meezan Bank Limited (First
Islamic Bank of Pakistan)
TABLE 1 HERE
CHALLENGES AND ISSUES OF ISLAMIC
BANKS
This area of literature is based on the issues of
Islamic banking such as customer’s awareness
about riba-free products, shariah board, staff,
training, marketing and quality of life. It provides
a theoretical evidence of my research.
Consumer awareness about Islamic banks
By taking into view the previous researches, the
challenges of low customer knowledge, awareness
and understanding of Islamic banking and its
financing methods were highlighted and
described. In this context, Gerrard and
Cunningham (1997) conducted a research in
Singapore to check the level of awareness about
Islamic banking. He found that Muslims are more
conscious towards the Islamic banking as
361
Manag. Adm. Sci. Rev.
e-ISSN: 2308-1368, p-ISSN: 2310-872X
Volume: 4, Issue: 2, Pages: 359-373
compared with the non-Muslim. His findings
asserted that only 20.7% has the knowledge of the
meaning of riba but amazingly, it remained a
problem that the exact meaning of Murabaha
could not be elucidated.
Similarly, another research was conducted in the
UK by Omer (1992) to know about the level of
knowledge about Islamic banking. For this
research, 300 Muslims were surveyed and the
results explained that whereas the level of
awareness about Islamic finance principles is
concerned, more people do not have knowledge
about this system. Besides this, it highlighted that
70% of the sample population had current
accounts and hardly anyone was reported to have
an account in an Islamic financial institution. To
conclude, it can be said that religion, no doubt,
provides guidance and remains a source of
motivation but in the UK, most of the Muslims
remained ignorant of Islamic system.
Customers’ Satisfaction and Understanding about
Islamic Banks of Pakistan
While conducting a research in major cities of
Pakistan, Ahmad et al. (2010) analyzed the results
of 720 respondents and explained that customers
of Islamic banks have higher reservation about
service quality as compared with conventional
bank where male customers have aptitude towards
Islamic banks as compared to conventional banks
whereas woman has opposite aptitude and prefers
conventional banking rather than Islamic banking.
Besides gender, age also matters a lot as people
having age group 25-34 are more interested with
Islamic banks whereas people having ages
between 18-24 had opposite views and were more
interested in conventional banks. In this regard, it
is a valuable suggestion for bank managers that
they should be more concerned about the
topography of a region and taking into mind about
the customers of that region so that can help take
initiate and make better their product.
The valued work of Khattak and Rehman (2010)
investigated 156 Pakistani respondents to know
about respondents’ awareness and reasons for
opting for Islamic banking and satisfaction level of
Islamic products and services and for this purpose,
they had to go to five branches of each Islamic and
conventional banking system in five cities of
Pakistan. They showed that whereas criteria is
concerned the factors of bank repute, privacy and
religion are the important factors and found that
age group causes to opt for Islamic banks such as
profitability, a number of services, bank standing
and abide by shariah rules, investment lucrative
chances given by the banks and level of secrecy
mattered a lot. Besides this, people had little knowhow about Islamic products such as Murabaha
(cost-plus), Ijarah (leasing) and Musharaka
(partnership) financing. Last but not least,
customers showed their level of satisfaction with
the behavior of management, effective and quick
way of transaction and comfortable working hour
of the bank and 67% respondents who had
accounts in Islamic banking but they were also
availing the services of conventional banking
products.
Intermittent reasons for choosing Islamic Banks
In order to draw a clear division according to the
existing research, three main areas can be: 1)
religion, the only feature, 2) religion and service
and 3) service the only element.
Religion, the only Feature
Religion plays a very effective role for the
achievement of Islamic banks because customers
were not fond of using conventional banking due
to religion (Billing, 2008; Metawa and AlMossawi,
1998; Omer, 1992). A study undertaken in Qatar by
Metwally (2001) took into view the significance of
socio-economic and demographic features for
choosing bank and highlighted that instead of
conventional banks, Islamic banks are usually
chosen by low income and fair level of education,
females, older consumers and public servants.
Conversely, young, higher educated professionals
and highly paid public servants use local
conventional bank as compared with foreign
conventional banks.
In Malaysia, a study was aimed at checking the
perceptions of users and non-users of Islamic
banking services and results validated that income
and age determine a lot in choosing Islamic
banking. He was of the view that age near thirty or
over with some extent sound family income people
use Islamic banks. While making comparison with
non-users of Islamic banks, he described that these
people are usually single, young and little income.
Besides, other factors such as wife, friend and
362
Manag. Adm. Sci. Rev.
e-ISSN: 2308-1368, p-ISSN: 2310-872X
Volume: 4, Issue: 2, Pages: 359-373
relatives play a significant role in decision making
processes of Islamic banks (Zainuddin, 2004).
Furthermore, surveys held in Saudi Arabia and
the UAE by Billing (2008) showed that choice plays
a decisive role and in this research, 76% of Saudis
and 71% of Emiratis speak out that they would go
for Islamic banking if they have a choice to choose
a bank. Similarly, in these two countries, more
than half of their population remarked that they
would be in favor of Islamic banks as compared
with non-Islamic banks no matter if they have to
pay more in Islamic banking.
Religion, Price and Service Quality
In this category, people prefer both Islamic and
conventional banks because of number of reasons
such as religion, price and service reasons (Haron,
1994). According to Abdul Kader (1993), local
Muslims in Malaysia are comprised of 1) those
who are purely religious minded and do not
compromise on religion and 2) those who are
called moderate Muslims because their main
concern was service quality and time value of their
savings.
As per the findings of Hegazy (1995) who chose
demographic profile of four hundred customers of
one Islamic bank and one conventional bank in
Egypt, he justified that religious motivation keeps
a central role, that is why, people used Islamic
banking and besides this factor, role of relatives,
friends, location preference, staff cooperation and
positive role of bank regarding community
helping were other gradients for choosing Islamic
banks.
The study which was conducted in Jordan focused
on consumer’s choice for a bank due to its well
standing in the market and its pledge to abide by
the Shariah principle (Naser, Jamal and AlKhatib’s,
1998).
The study of AlSultan (1999) also validated the
factor of religion as a common factor for people of
Kuwaitis where as conventional banks’ users were
in the favor of better service and that is why they
used conventional banks. The results show that in
this context, people are least concerned or
bothered about quality of bank services where
religion comes and for them, Islamic banks are the
best one.
On the other hand, customers of Islamic savings
and investment in Malaysia are more attracted
towards profit motive and recommended Islamic
banks that they should not focus on profit aspect
in their marketing campaign. It is the duty of the
bank to stress whether it is profit or low it comes
from God (Haron and Ahmad, 2000). According to
Wilson (2002), in the beginning, no doubt, religion
was the dominating factor in selecting banks but
with the passage of time due to goodwill of Islamic
banks, brand name and image got momentum.
Only Service Quality
The third category clearly indicates that people use
Islamic banks because of the service quality solely.
Erol and El-Bdour employed self-administered
questionnaire twice in 1989 and 1990 to check the
behavior of Islamic and conventional bank
customers and disclosed that in Jordan, though
people have know-how about Islamic banks and
their procedures yet religion does not or guiding
principle in choosing a bank.
Marketing Issues of Islamic banks
Leaving aside other above issues, Wahib (2007)
explained that marketing messages of the banks
are not aimed at giving them clear and true picture
of Islam which plays a significant role. In this
context, saying that a product is shariah based
does not satisfy the customers’ demand and more
required from banks that they should give
authentic and candid information about the
Islamic tenets regarding deposits and investment
(Kahf, 2004; Rice and AlMossawi, 2003; Wilson,
2005; Ahmed, Hamoud, Kahf 1998). Besides, Kahf
(2002) and Wilson (2005) pointed out the drawback
of the Islamic banks by pinpointing that banks are
not interested in telling their customers about
publicity material and annual reports and they are
more concerned that operation in banks is with the
accordance of shariah.
The literature further indicated that Islamic banks’
websites focused more on graphics and serving
advertising purposes than on technical support to
customers (De, Shakeel, 2004; Wilson 2005). Wilson
(2005) also stressed the fact that Islamic bank
websites should give more explanation about how
riba can be equated with interest and usury, and
should elaborate on the principles used by the
363
Manag. Adm. Sci. Rev.
e-ISSN: 2308-1368, p-ISSN: 2310-872X
Volume: 4, Issue: 2, Pages: 359-373
banks for financing instruments. Also, Islamic
banks’ annual reports should be different from the
conventional banks’ reports by spelling out a
vision based on Islamic principles (Lodhi and
Kalim, 2005).
In this contemporary world, competition keeps a
unique position because every bank wants to
distinguish its products and marketing, hence, it is
debatable question. As a matter of fact, in Pakistan
the ratio of people using riba (usury) whereas a
small portion (5.1%) of our population is affiliated
with Islamic banking. Similarly, there is least
difference whereas marketing campaign of
conventional and Islamic banking is concerned. In
order to address this problem, banks must play
their effective role initiating such types of
marketing campaigns which can help create
awareness about their products and services and
marketing campaign should be based on those
areas where people are not literate and less
developing places leading a miserable way of life
where conventional banks have missed that
population (Ahmad et al., 2010).
Outmoded services by Islamic banks
In reality, Al Nasser (2008) pointed out that our
banking system does not take advantages of
modern technology and people still in banks are
fond of using traditional way of transaction which
creates the problem of human error and hindrance
in methods and procedures. In addition, the up to
dated technology of ATM and internet banking are
not still the part of Islamic banking because of its
complex processes (De, Shakeel, 2004). If there is
proper execution of policies then low-profitability
customers could be convinced to use such modern
technology discussed above. In order to overcome
the secrecy issue, Abdul Ghani (2005) asserted that
it is the responsibility of the banks to provide fool
proof security system in electronic banking system.
Unpredictability and Uncertainty
Commitment in Pakistan
of
Political
An effective judicial system of a country can
contribute towards national development. But in
Pakistan, this is a major hindrance as dearth of
reforms, planning, devoted behavior and strong
will power of the government (Hairedinov, 2004).
In Pakistan, there is huge gap between saying and
practice as it is observed in the case of politician.
When they are in election campaign they make
grandiose promises and once they come into
power they forget their promised commitment. In
this regard, role of religious parties about Islamic
banking is clear as they are of the belief that by
implementing Islamic banking system with real
heart and soul, we can avoid foreign and domestic
interest based debt. So it also shows the negligence
and non-serious attitude of the government which
is not willing to bring in any reform which can
change conventional banking system with interest
free system (Hairedinov, 2004).
Lack of Regulation and Implementation in Pakistan
In Pakistan, Mehmood (2002) highlighted that
banks in our country lacked proper policies as per
the teachings of shariah is concerned and for this
purpose, the Council of Islamic Ideology (CII) gave
some valuable suggestions but could be enforced.
Besides this, CII was in against setting up separate
banks for interest based as they had of the opinion
that such steps could never pave the way for
establishing interest free banking system.
Tahir (2004) in riba judgment in 1999 outlined that
for establishing interest free economy, it is the duty
of the government to introduce such policies and
create funds not relying solely on interest-based
borrowing. While our policy makers and think
tanks were unable to find other ways to this huge
domestic debt.
Training Institutions for Islamic Banks in Pakistan
Ahmad (2002) outlined that by ironing out the
problem of fewer quality human resources, the
efforts of National Institute of Banking and
Finance and training wing of State Bank of
Pakistan played a significant role by giving
certification program for Islamic banks employees.
Al-Huda is also creating awareness and addresses
the misconception of people regarding the
teachings of Islam. Dar-ul-Uloom Karachi’s effort
is appreciating where they are giving many
services such as training, conducting international
conferences and emphasizing research work.
Insufficient Effort by Shariah Scholars to Standardize
the System in Pakistan
Nearly about twenty shariah scholar gave their
verdict in 2008 by giving fatwa that Islamic
banking was based on haram (Lodhi and Kalim,
364
Manag. Adm. Sci. Rev.
e-ISSN: 2308-1368, p-ISSN: 2310-872X
Volume: 4, Issue: 2, Pages: 359-373
2005). Such judgment created suspicion in the
heart of the people by thinking that Islamic
banking system was ḥalal or haram. In this context,
ijma‟ (consensus) is the need of the hour to
develop agreement among national and
international shariah scholar. For this, people
belonging to different walk of life and shariah
scholar would discuss and give the consensus of
this challenging problem (Lodhi and Kalim, 2005).
An overview was presented regarding the issues
confronted by Islamic banks regarding consumer’s
satisfaction and know-how about Islamic banking.
it is also highlighted that adopting conventional
products and idle in growing new products,
Islamic banks showed that their agenda aimed at
making huge profit in the name of religion.
Besides, there is a drawback in the marketing of
Islamic banks regarding information about
product, ethical values and Islamic teachings
which provide guiding principle for conducting an
affair of business. Different suggestions were put
forward in this section to make a rapid and
progressive system of Islamic banking.
THE ANTICIPATED CAUSES OF THE LESS
CAPITALIZATION OF ISLAMIC BANKING
AND FINANCE IN PAKISTAN
The IBF movement which was launched in
Pakistan with higher expectations has repeatedly
taken one step forward and two steps back since
1980. Consequently it has lost real significance and
appeal in the eyes of the people of Pakistan. This
has essentially happened, because IBF institutions
cannot perform as an alien entity in the Muslim
polity. They are religion-based bodies and
therefore, need Islamically infused sociopolitical
and economic environment to survive and
prosper. This is very core prerequisite and was
grossly ignored at the time when IBF system was
introduced in Pakistan (Mansoor, 2008).
Government machinery
In Pakistan, government strengthens and promotes
its institutions but in the case of IBF, government
was not interested to make it effective. In this utter
failure of IBF, government and bureaucrats are
held responsible for the failure.
Lack of genuine political support
After the independence of Pakistan, Pakistan
political leadership focused on changing colonial
system in the light of Islamic teachings (Ahmad, J,
1952). But due to a number of issues which
Pakistan confronted after the independence did
not pave the way for the process of Islamization.
Later on, country was ruled by such type of people
who made governments department subservient
and compelled to serve for their vested interests. In
1970, Muhammad Ziaul Haq was running the
affairs of the country and sought help from religiopolitical parties to change his military era into
democratic one (Bhatti, 2008). For that purpose, he
had to implement some premature Islamic
practices in order to become popular among
religious parties who demanded Islamization in
Pakistan. He ordered the Council of Islamic
Ideology to prepare some suggestion but could
implement its recommendations. He did a lot of
works by stopping federal Shariat court giving
verdict
against
interest-based
government
transactions and giving permission to SBP to
instruct financial institutions to spend PLS funds
in interest-bearing government (Bhatti, 2008).
The noncommittal attitude of bureaucrats
In reality, bureaucrats keep a central role in any
administrative set-up because ruling parties use
bureaucrat to make the system stand still (Gardezi
and Rashid, 1983). When in 1970, government
followed nationalization policy then private bank
came direct under the control of these bureaucrats
who preferred conventional banking system as
they had no prior training in the banking sector.
Such circumstances really resulted in the shape of
loss market environment, domestic and foreign
investment (Tansi, 1996). The bureaucrats had of
the opinion that Islamization could not meet their
hidden interest and that is why, they did allow the
enforcement of IBF system practically. Therefore,
they used conventional banking by using the label
of Islamic system. It is further justified that CII
held responsible bureaucrats for not progress and
advancement of IBF in Pakistan.
The banking and financial sector environments
The SBP and other financial institution did not
allow reforms in the financial system as they think
reforms proposed by IBF are not implemented in
our system.
365
Manag. Adm. Sci. Rev.
e-ISSN: 2308-1368, p-ISSN: 2310-872X
Volume: 4, Issue: 2, Pages: 359-373
Non-performing loans, write-offs and co-operative
scandals
The history of Pakistan is replete with high level of
non-performing loans. From 1985 to 1993, banks
defaults were nearly Rs 23.4 billion to Rs 95.7
billion. Such figure increased Rs. 279 in 2002.
Similarly, the write-offs of non-performing loans
were Rs 16.60 billion during 1985-98.
Besides it, political misuse of the loans was also
witnessed. It happened in that case where prime
minister directed the governor of SBP to distribute
loan among his close aide, friends and relative
without following any procedure or rule (Mullick,
1993). In 1997, a list of defaulters nearly 5300
names were given including top politicians,
powerful business man, military generals
(Mansoor and Ishaq, 2008)
Expensive and unpopular financial services
Financial services are very costly because of bank
defaults, bad debt, concession borrowing and
excessive use by bank officials (Yaqoob, 1995). In
reality, no benefits are given for saving and
investing that is why, a number of depositors
belong to small savers who save money for
education and old age. Therefore, such banking
services further exacerbate the situation in
Pakistan due to low level of capital information
and investment.
General socio-economic governance
It is a fact that our socio-economic set-up does not
support the enforcement of IBF system. In
Pakistan, huge depositors and businessmen do not
like to have business with banks under the PLS
principles. Other socio-economic set-up is totally
not in accordance with the Islamic teachings.
Cold shoulder from business people
Pakistani are in the habit of managing two
accounts: they usually hide their original income
and transform their funds from profit making
account to loss making accounts to evade tax. That
is why; they do not come in the category of PLS
relationship with banks because bank needs their
business profit and private information. Hence,
credible people investing in Islamic banking are
very few (Bhatti, 2008).
Weak and slow legal system
Our legal system takes too much time to decide the
loan related cases. Average time of 3 to 6 years is
taken to finalize the initial decision and almost 5 to
10 years are taken for final appeal and other
related issues. Therefore, financial institutions
usually leave the bad debts because of the fear of
wastage of time in the court related activities
(Khan, MA, 1997). In this context, government
does not seem serious to take such steps which can
protect IBF practice against misuse. Government
has established special banking Tribunals to solve
the bank related cases as soon as possible but these
tribunals are not permanent.
Rigid and narrowly based tax system
Owing to flawed policy of tax, our financial
expenditures are not met due to taxes and every
year there is small tax. In 2000-2001, total tax
revenue was just 13 % of GDP. The government is
concerned with this issue and brought about many
reforms but still tax circle is just limited to 1.5 % of
the total citizens of Pakistan (Saeed, 2000; Husain I,
2005). Besides, agriculture, the back bone of our
economy, seeks relief of tax depriving billions of
dollars. Besides this, political influence still
prevails on tax system. Instead of making its tax
system more reliable and suitable, government
heavily depends on borrowing from internal and
external sources by saving their hidden agendas
(Haq, I, 1999). Such tax system cannot allow IBF
system to be applicable in Pakistan.
Malpractices and rampant corruption
Corruption is a most common problem of Pakistan
because lack of accountability in Pakistan. Besides
this, people are indulged in mal practices,
hoarding, nepotism, red tapeism, appointment on
political basis, etc. It is not concerned with
common but prime ministers and parliamentarians
are usually indulged in corruption. Lack of
monitoring is resulted in hoarding, adulteration,
bribery and tax evasion. Gallup Institute of
Pakistan conducted a survey and came to know
that corruption in Pakistan raised 50% from 1970
to 1980 so such malpractices also tarnish our image
and can destroy the economic system of Pakistan.
Dr. Mahbub-ul-Haq believed that corruption was 2
% of our GNP in 1988 and rose to 5 % in 1993
(Bhatti, 2008).
366
Manag. Adm. Sci. Rev.
e-ISSN: 2308-1368, p-ISSN: 2310-872X
Volume: 4, Issue: 2, Pages: 359-373
Privatization and globalization of the market economy
Islamic banking came into being in early 1980
when there was no problem of regulation and
remained kept aloof of international financial
markets. At that time, the financial sector of
Pakistan was comprised of 5 government-run
banks and others few institutions. In 1990,
government made a policy of market-oriented
banking and finance services in order to lure
foreign investment. For this purpose, government
had to privatize its 2 banks and other financial
institutes awarding license to 10 private banks.
These steps resulted in global opportunities and
competition in the financial market of Pakistan.
The policymakers were of the belief that in order
to remain in touch with international markets, we
have to be focused on globalization and any step
towards Islamization and that would cause in
flight out the huge capital from Pakistan. Hence,
the scope of IBF system is losing its credibility
(Khan M M and Bhatti, 2006).
In reality, Islamic financial institutions need the
cooperation of all state institutions in order to
achieve goal and fulfill objectives. But IBF was not
implemented due to number of issues in Pakistan.
General Zia was the first to introduce Islamization
but it was purely for vested interests and he did
few steps whereas Islamization of Islamic banking
is concerned. Besides, lack of commitment of
bureaucrats and skills in the banking sector, they
preferred conventional banking system as
compared with Islamic banking system as these
bureaucrats had no knowledge of banking and
was not trained Islamic banking training. Even the
role of SBP is not praising because of use of
conventional mark-up modes in the banking and
financial sector of Pakistan.
FIGURE 1 HERE
Based on the conceptual model the following
hypotheses are proposed.
H1:
There is a positive relationship between the
business and social conditions with Superfluous
Capitalization of Islamic Banks
H2:
There is a positive relationship between the
financial sector environments with Superfluous
Capitalization of Islamic Banks
H3:
There is a positive relationship between the
effective product marketing with Superfluous
Capitalization of Islamic Banks.
H4:
There is a positive relationship between the
Islamic banker’s awareness with Superfluous
Capitalization of Islamic Banks.
H5:
There is a positive relationship between the
market
opportunities
with
Superfluous
Capitalization of Islamic Banks.
H6:
There is a positive relationship between the
government
machinery
with
Superfluous
Capitalization of Islamic Banks.
CONCLUSION AND RECOMMENDATIONS
Another reason is the poor system of judiciary
where cases take 5 to 10 years to be decided and
such a long period discouraged the banks and
customers as well. Besides, people do not pay tax
and maintain two accounts to evade tax, that is
why, our agriculture sector is not paying proper
tax due to concession given by the government.
The application of the Islamic system by force and
in superficial ways is absolutely against its own
true spirit. But the government made few efforts to
seek the compliance in and participation of the
people of Pakistan for the Islamization of the
economy through education, increasing awareness
and moral training. Realistically speaking, the IBF
system has yet to be adopted in Pakistan under a
truly Islamic and scientific approach. However, the
prospects for IBF in Pakistan are highly
unpredictable and bleak. The political leadership
and financial managers of Pakistan strongly argue
that the strategy of promoting IBF within the given
conventional set-up of the country is truly mature,
market-based and efficient, and highly compatible
with contemporary patterns of economic and
financial globalization, and has therefore been
adopted on a permanent basis.
From the discussion made above a conceptual
model is drafted to check whether the above
mentioned causes really affect the contemporary
system of Islamic banking and its capitalization of
funds or not.
The conceptual model suggest that the relationship
among business and social conditions, financial
sector environments, effective product marketing,
Islamic banker’s awareness, market opportunities
and government machinery with Superfluous
367
Manag. Adm. Sci. Rev.
e-ISSN: 2308-1368, p-ISSN: 2310-872X
Volume: 4, Issue: 2, Pages: 359-373
Capitalization of Islamic Banks should be tested so
that it can be determined that which variable has
significant effect and which variable has no
significant effect thereon.
REFERENCES
Ahmad, A., ur Rehman, K., & Saif, M. I.
(2010). Islamic banking experience of
Pakistan:
comparison
between
Islamic
and
conventional
banks. International Journal of Business
and Management, 5(2), p137.
Ahmad, J (ed) 1952, Some Recent Speeches and
Writings of Mr. Jinnah, Shaikh
Muhammad
Ashraf
Publishers,
Lahore.
Ahmad, N., & Haron, S. (2002). Perceptions of
Malaysian
corporate
customers
towards Islamic banking products
and services. International Journal of
Islamic Financial Services, 3(4), 13-29.
Ahmed, L. (1992). Women and gender in Islam:
Historical roots of a modern debate. Yale
University Press.
Akhtar, S. (2006). The financial sector of
Pakistan–the
roadmap. Islamic
finance news, 3(16), 26.
Al-Arabi, M. A. (1966). Contemporary
Banking Transactions and Islam’s
views
thereon. Islamic
Review,
London, May.
Almossawi, M. (2001). Bank selection criteria
employed by college students in
Bahrain:
an
empirical
analysis. International Journal of Bank
Marketing, 19(3), 115-125.
Anwar, M., & Saeed, M. (2013). Promotional
Tool of Marketing: An Islamic
Perspective. Intellectual
Discourse, 4(1&2).
Asmat, S. (2014). Islamic Finance in the
Western World: Development, legal
regulation and challenges faced by
Islamic Finance in the United
Kingdom.Journal of Islamic Banking &
Finance, 31(2).
Azhar Rosly, S., & Afandi Abu Bakar, M.
(2003). Performance of Islamic and
mainstream
banks
in
Malaysia. International Journal of
Social Economics, 30(12), 1249-1265.
Bley, J., & Kuehn, K. (2004). Conventional
versus Islamic finance: student
knowledge and perception in the
United Arab Emirates. International
Journal
of
Islamic
Financial
Services, 5(4), 17-30.
Chapra, M. U., & Ahmed, H. (2002). Corporate
governance in Islamic financial
institutions. Occasional paper, 6.
Choudhury, M. A. (2005). Islamic World
System: A Study in Polity-Market
Interaction. Routledge.
Damayanti, T. W., Sutrisno, T., Subekti, I., &
Baridwan, Z. (2015). The Role of
Taxpayer’s
Perception
of
the
Government and Society to Improve
Tax Compliance. Accounting and Finance
Research, 4(1), p180.
El Qorchi, M. (2005). Islamic finance gears
up. Finance and Development, 42(4),
46.
El-Gamal, M. A. (2006). Overview of Islamic
finance. US Department of the
Treasury.
El-Gamal, M. A. (2006). Overview of Islamic
finance. US Department of the
Treasury.
Ely, T. L., & Calabrese, T. D. (2014). To Give Is
to Get: The Promotional Role of
Investment Bankers in Local Bond
Elections. The American Review of Public
Administration, 0275074013515546.
Fadel, M. (2004). Islamic Finance. American
Society of Comparative Law & Society.
368
Manag. Adm. Sci. Rev.
e-ISSN: 2308-1368, p-ISSN: 2310-872X
Volume: 4, Issue: 2, Pages: 359-373
Gardezi, H., & Rashid, J. (1983). Islamic
Economic Reforms under the
Military Government.
Gerrard, P., & Barton Cunningham, J. (1997).
Islamic banking: a study in
Singapore. International Journal of
Bank Marketing, 15(6), 204-216.
Grabner-Kraeuter, S., & Moedritscher, G.
(2002, June). Alternative approaches
toward
measuring
CRM
performance.
In Sixth
Research
Conference on Relationship Marketing
and
Customer
Relationship
Management, Atlanta (June 9–12).
Hair, J. F., Anderson, R. E., Tatham, R. L., &
Black, W. C. (1998). Multivariate
analysis. Englewood: Prentice Hall
International.
Hairetdinov, R. nd “Islamic Financial
System”. Iqtisad Journal of Islamic
Economics.
Hamid, A., & Nordin, N. (2001). A study on
Islamic banking education and
strategy for the new millenniumMalaysian experience. International
Journal
of
Islamic
Financial
Services, 2(4), 3-11.
Haron, S., & Ahmad, N. (2000). The effects of
conventional interest rates and rate
of profit on funds deposited with
Islamic banking system in Malaysia.
International
Journal
of
Islamic
Financial Services, 1(4), 1-7.
Haron, S., & Ahmad, N. (2000). The effects of
conventional interest rates and rate
of profit on funds deposited with
Islamic banking system in Malaysia.
International
Journal
of
Islamic
Financial Services, 1(4), 1-7.
Haron, S., Ahmad, N., & Planisek, S. L. (1994).
Bank patronage factors of Muslim
and
non-Muslim
customers. International Journal
Bank Marketing, 12(1), 32-40.
of
Hasan, A. B., & LAWS, A. I. K. O. (2007).
Optimal Shariah Governance in
Islamic
Finance. Islamic
Finance
News, 4(14), 7.
Hasan, M. Z., & Kamil, A. A. (2014).
Contribution of Co-Skewness and CoKurtosis of the Higher Moment CAPM
for Finding the Technical Efficiency.
Economics Research International, 2014.
Hasan, Z. (2011). Sharīʿah governance in Islamic
financial institutions in Malaysia, GCC
countries and the UK (Doctoral
dissertation, Durham University).
Hasan, Z. (2011). Sharīʿah governance in Islamic
financial institutions in Malaysia, GCC
countries and the UK (Doctoral
dissertation, Durham University).
Homoud, S. H. (1994). Progress of Islamic
Banking: The Aspirations and the
Realities. Islamic
Economic
Studies, 2(1), 71-80.
Iqbal, M. (2001). Islamic and conventional
banking
in
the
nineties:
a
comparative study. Islamic Economic
Studies, 8(2), 1-27.
Iqbal, M., & Molyneux, P. (2005). Thirty years
of
Islamic
banking:
history,
performance, and prospects.
Iqbal, M., & Molyneux, P. (2005). Thirty years
of
Islamic
banking:
history,
performance, and prospects.
Iqbal,
M., Aḥmad, A., & Khan, T.
(1998). Challenges
facing
Islamic
banking. Islamic Research and
Training Institute.
Iqbal, Z. (2007). Challenges facing Islamic
financial industry. Journal of Islamic
Economics, Banking and Finance
(JIEBF), 3.
Iqbal,
Z., & Mirakhor, A. (2011). An
introduction to Islamic finance: Theory
369
Manag. Adm. Sci. Rev.
e-ISSN: 2308-1368, p-ISSN: 2310-872X
Volume: 4, Issue: 2, Pages: 359-373
and practice (Vol. 687). John Wiley &
Sons.
Comments]. The Pakistan Development
Review, 1003-1020.
Jalees, Tariq. ―Marketing of Islamic Financial
Products.‖ Seminar. Karachi Institute
of Economic and Technology, Karachi.
June 2005.
Mai, L. W. (2005). A comparative study
between UK and US: The student
satisfaction in higher education and
its influential factors. Journal of
Marketing Management, 21(7-8), 859878.
Kahf, M., & Khan, T. (1992). Alternative
Strategies of International Financing.
International Economic Relations from
Islamic Perspectives, Islamic Research
and Training Institute, IDB, Jeddah.
Karbhari, Y., Naser, K., & Shahin, Z. (2004).
Problems and challenges facing the
Islamic banking system in the west:
The case of the UK. Thunderbird
International Business Review, 46(5),
521-543.
Mansoor Khan, M., & Ishaq Bhatti, M. (2006).
Why interest-free banking and
finance
movement
failed
in
Pakistan. Humanomics, 22(3), 145-161.
Mansoor Khan, M., & Ishaq Bhatti, M. (2006).
Why interest-free banking and
finance
movement
failed
in
Pakistan. Humanomics, 22(3), 145-161.
of the Federal
judgement on
riba from the
Policy Studies,
Mansoor Khan, M., & Ishaq Bhatti, M. (2008).
Development in Islamic banking: a
financial
risk-allocation
approach. The
Journal
of
Risk
Finance, 9(1), 40-51.
Khan, M. A. (1997). Performance auditing for
Islamic
banks. Islamic
Economic
Studies, 5(1), 23-36.
Mansoor Khan, M., & Ishaq Bhatti, M. (2008).
Islamic banking and finance: on its
way to globalization. Managerial
Finance, 34(10), 708-725.
Khan, M. A. (1994). Review
Shariat Court (FSC)
riba. Elimination of
Economy, Institute of
Islamabad, 11-26.
Khan, M. S. N., Hassan, M. K., & Shahid, A. I.
(2007). Banking behavior of Islamic
bank
customers
in
Bangladesh. Journal
of
Islamic
Economics, Banking and Finance, 3(2),
159-194.
Khattak, N. A., Rehman, K. U. (2010).
Customer satisfaction and awareness
of Islamic banking system in
Pakistan. African Journal of Business
Management 4(5), 662-671.
Kuran, T. (1995). Islamic economics and the
Islamic subeconomy. The Journal of
Economic Perspectives, 155-173.
Lodhi, S. A., Kalim, R., & Iqbal, M. (2005).
Strategic Directions for Developing
an Islamic Banking System [with
Masood, S., Rehman, S., & Rehman, C. A.
(2014).
Cognizing
Customer
Awareness and Perception of Islamic
Banking
Products
in
Pakistan.International
Journal
of
Operations
and
Logistics
Management, 3(4), 322-336.
Mehmood, A. (2002). Islamisation of economy
in Pakistan: past, present and
future. Islamic studies, 675-704..
Mehmood, A. (2002). Islamisation of economy
in Pakistan: past, present and
future. Islamic studies, 675-704.
Mehta, M. A. M. (2014). Searching for Hills
among Plateaus, Mountains and Plains;
Understanding
Determinants
of
Economic Growth in Pakistan. Journal of
370
Manag. Adm. Sci. Rev.
e-ISSN: 2308-1368, p-ISSN: 2310-872X
Volume: 4, Issue: 2, Pages: 359-373
International Business and Economics,
2(2), 83-90.
Metawa, S. A., & Almossawi, M. (1998).
Banking behavior of Islamic bank
customers:
perspectives
and
implications. International Journal of
Bank Marketing, 16(7), 299-313.
Metawa, S. A., & Almossawi, M. (1998).
Banking behavior of Islamic bank
customers:
perspectives
and
implications. International Journal of
Bank Marketing, 16(7), 299-313.
Mullick, M. A. H. (1993). SBP: struggling to
assert its autonomous character.The
Nation, 14.
Naqvi, S. N. H. (Ed.). (2013). Islam, economics,
and society. Routledge.
Naseem, S. M. (1973). Mass poverty in
Pakistan: Some preliminary findings.
The Pakistan Development Review, 317360.
Owlia, M. S., & Aspinwall, E. M. (1997). TQM
in
higher
education-a
review.International Journal of Quality
& Reliability Management, 14(5), 527543.
Qaḥf, M. M. (1978). The Islamic Economy:
Analytical Study of the Functioning of
the Islamic Economic System. Muslim
Students' Association of the United
States and Canada.
Saeed, K. A. (2000). Economy of Pakistan.
Institute of Business Management.
Seth, K. L. (2014). The pattern of economic
development in Pakistan.
Supreme Court of Pakistan, Shariah Appellate
Bench (SAB), Judgment on Riba
1999, Shariat Law Reports, Lahore.
Review 2002, Shariat Law Reports,
Lahore.
Taqī ʻUs̲mānī, M. (2004). An introduction to
Islamic finance. Arham Shamsi.
The Prime Minister’s Committee Report on
Self-Reliance 1991, Cabinet Report
Documents, Government of Pakistan,
Islamabad.
Uppal, J. Y., & Mangla, I. U. (2014). Islamic
Banking and Finance Revisited after
Forty Years: Some Global Challenges.
Journal of Finance.
Uzair, M 1997, ‘Interest, inflation and Islam’,
Dawn, 11 November, p. 8.
Wajdi Dusuki, A., & Irwani Abdullah, N.
(2007). Why do Malaysian customers
patronize
Islamic
banks?. International Journal of Bank
Marketing, 25(3), 142-160.
Wilson, R. (2002). Parallels between Islamic
and ethical banking. Review of Islamic
Economics, 51-62.
Zaabi, O. S. H. A. A. (2007). Measuring the
perceived
service
quality:
an
empirical study of Islamic banks in
the UAE. In IIUM International
Conference on Islamic Banking &
Finance IICiBF.
Zainuddin, Y., Jahyd, N., & Ramayah, T.
(2004).
Perception
of
Islamic
banking: does it differ among users
and non users. Jurnal Manajemen dan
Bisnis, 6(2), 135-149.
Zaman, M. R., & Movassaghi, H. (2002).
Interest-free Islamic banking: ideals
and reality. International Journal of
Finance, 14(4), 2428-2442.
Supreme Court of Pakistan, Shariah Appellate
Bench (SAB), Judgment on Riba Case
371
Manag. Adm. Sci. Rev.
e-ISSN: 2308-1368, p-ISSN: 2310-872X
Volume: 4, Issue: 2, Pages: 359-373
APPENDIX
Table 1: History
1947
Pakistan was come into being as Islamic Republic of Pakistan; created in the appellation of Islam.
1962
Council of Islamic Ideology (CII) established to prepare report for usury-free banking
1980
On Islamic banking a major comprehensive work on interest elimination was made by the
Council of Islamic Ideology (CII).
1985
Federal Shariat Court declared the procedure adopted by banks was un-Islamic. Commercial
banks transformed their all Rupee saving accounts to become interest-free. However, foreign
currency deposits in Pakistan and lending of foreign loans continued as before. 12 modes of
finance were introduced.
1991
Federal Shariat Court has declared the nomenclature introduced in 1985 as in-islamic. Some
banks had appealed in Supreme Court of Pakistan, Shariat Appellate Bench.
1997
Mr. Irfan Siddiqui appointed as founder CEO of Al-Meezan Investment Bank which was
established in 1997.
1999
The government started promoting the Islamic banking on analogous basis with conventional
banking after the rejection of appeals filled in 1985 by Supreme Court of Pakistan.
2000
Islamic banking were introduced by State Bank of Pakistan
2001
A detailed set of criteria was issued for the Islamic banking operations by State Bank of Pakistan
and in the chairmanship, of Justice (Retd) Muhammad Taqi Usmani at Al-Meezan Investment
Bank; the Shariah Supervisory Board was established in 2001.
2002
In Karachi President General Pervez Musharraf inaugurated the first full-fledged Islamic Bank
named as Meezan Bank that was previously entitled as Al Meezan Investment Bank.
2003
State bank has forwarded the instructions for the commencement of Islamic banking branches.
Also Meezan Bank established Al Meezan Investment Management Limited (AMIM), and
Meezan Islamic Fund (MIF). Meezan Bank had established branches in all major cities of the
country. According to Zohaib.K (2009) other Islamic Banks like Bank of Khyber, MCB Bank, and
Bank Alfalah were inaugurated.
2004
As the Islamic Banking industry was emerging so the Shariah Board was established for
constructing guidelines according to shariah compliance. Meezan Bank had started acting as the
Shariah Structuring Advisor for performing the Islamic transactions. Two benchmarks were also
established namely Islamic Banking Department (IBD) by SBP and international Sukuk (Bonds)
by Government of Pakistan. According to Zohaib.K (2009) other Islamic Banks like AL Baraka
Islamic Bank, Habib Bank AG Zurich, Standard Chartered, Metropolitan Bank, and Soneri Bank
were inaugurated.
2005
The first Memorandum of Understanding was signed with Pak-Kuwait Takaful Company
Limited by Meezan Bank. This resulted in the beginning of Islamic Insurance (Takaful).
According to Zohaib.K (2009) other Islamic Banks like Habib Bank, Bank Al Habib were
inaugurated.
2006
In 2006 Emirates Global Islamic bank and Bank Islami had initiated their operations as Islamic
banks in Pakistan. According to Zohaib.K (2009) other Islamic Banks like Dubai Islamic Bank,
Bank Islami Pakistan, ABN Amro N.V. (Now RBS Bank), Askari Bank Ltd, National Bank, United
Bank Ltd were initiated.
2007
Meezan Bank's branches network become wider i.e. 100 branches in 31 cities. Car Ijarah, Easy
Home portfolio, and Istasna' financing was introduced for accounting the needs of customers.
372
Manag. Adm. Sci. Rev.
e-ISSN: 2308-1368, p-ISSN: 2310-872X
Volume: 4, Issue: 2, Pages: 359-373
Deposit, profits after tax and trade Finance business reached at Rs. 54 billion, Rs. 963 million and
Rs. 70 billion respectively. According to Zohaib.K (2009) other Islamic Banks like Emirates Global
Islamic and Dawood Islamic Bank were initiated.
2008
Tijarah financing was introduced for financing in stocks of finished goods. Branch network grew
to 166 branches in 40 cities, deposit and total financing portfolio grew to Rs. 70 billion and Rs. 39
billion respectively.
2009
Meezan Bank's branches network become widespread i.e. 201 branches in 54 cities. Deposits
become Rs. 100 billion; and Rs. 100 billion of import/export business. Meezan Bank started Hajj
and Umrah product namely Meezan Labbaik. Meezan Visa Debit Card was also launched.
2010
New products like Meezan Business Plus, Meezan Euro Savings Account and Meezan Pound
Savings Account were initiated. 38 seminars for customer awareness were apprehended in 23
cities and 4400 personals have participated therein. The network became 222 branches in 63
cities.
2011
Full-fledged Islamic bank Emirates Global Islamic Bank merged with another full-fledged Islamic
bank, AL Baraka Bank. During 2011, 53 new branches were opened. The bank launched Meezan
Laptop Ease and short-term Sukuk for Kot Addu Power Company Limited.
Extracted From; The history of Islamic Banking in Pakistan & highlights of Meezan Bank, and
Zohaib.K (2009) http://www.meezanbank.com/pages.aspx?iPageID=34
Figure 1: Conceptual Model
373