[Summer] 2011: Islamic Finance

[Last Island]

THE INSTITUTE OF BANKERS PAKISTAN
ISQ Examination (Summer-2011)
ISLAMIC BANKING AND FINANCE

Q.1 Please write the alphabet of the selected choice in the answer column:

Q.2 State True or False in the answer column.

Q.3 A) Define and explain conditions for a Valid Sale (Bai) according to Shariah.
Q.3 B) What is Kayar. Explain at least four types of Kayars.

Q.4 A) How is Shariah Compliant Ijarah different from conventional lease. Identify the differences.
Q.4 B) A Housing Finance Company which undertakes conventional housing finance is planning to convert its operations into Shariah compliant operations. Suggest a mechanism through which outstanding housing finance loan is converted into Shariah compliant financing.

Q.5 Consider yourself as Internal Shariah Auditor. You came across an Ijarah transaction of Rs. 50 million with M/s ABC Transporters for the leasing of trucks. Following is the chronology of the transaction.

A) Are there any flaws(Shariah, Accounting as per IFAS-II or Commercial) in the transaction? If yes, please identify them. What could have been done to avoid these flaws.
B) Assume yourself as the RM for ABC Transporters. What steps/ improvements should be taken to avoid situation arising on January 11, 2012, in future.

Q.6 Suggest Shariah compliant structure for following types of financings. Describe reason(s) for selecting the mode of finance.
A) Financing for purchase of Furnace Oil by an Independent Power Producer located in Upper Sindh. Oil is transported through oil tankers from Karachi to upper Sindh by PSO.
B) Financing to Farmers for cultivation of cotton.

Q.7 How are deposits managed in an Islamic Bank. Explain with the help of an example.

Q.8 What is Sukuk. How can GOP use Sukuk structure for undertaking infrastructure projects in Pakistan.

Q.9 Islamic banks are spreading across the globe. You are required to give arguments in favour of Islamic banks.

Q.10 How does Islamic Banking differ from conventional banking?