Interview with: Mr.

Afaq Hussain
Manager
Bank: Meezan Bank Ltd. (University Road Branch,
Peshawar)
----------------------------------------------------------------------------------------Q.1. What are your products?
Ans: Ijarah that includes Car Ijarah and Bike Ijarah, Durable
goods financing facility, which includes goods like
Generators, Laptops, Cameras, Fridge, ACs etc., Takaful,
House Financing which includes Buying new house,
building new house, renovating your house, etc., Term
Deposits like Certificate of Islamic Investment, Meezan
Amdan Certificate which are basically Mudaraba
Instruments, Agriculture Financing, Asset Management (Al
Meezan Investment Management Ltd., LC accounts, Islamic
Microfinance Musharika etc.
Q.2. How is Islamic Banking different from Conventional
Banking?
Ans: There are many differences like if the bank sells you
something, which is Murabaha, you have to ascertain the
price before hand, and have the products in our custody or
title which we did on the request of the client. That thing is
later sold to the client directly, mostly on deferred
payment. This process is done in various steps as per
Islamic Shariah (which our bank is reputed and famous for)
unlike Conventional bank, where the bank sells you
something upon application with margin.
Also, we offer Car and Bike Ijarah, which is different from
Conventional lease in the manner that we receive a small
down payment and subsequent rents over a period of 5
years inlcluding giving 400000 in case of death of our
client which conventional banking doesnt have. Also at the
end of these 5 years, the vehicle could as well be gifted to
the customer having the rentals received.

Q.3. How is Islamic Banking in practice different from as is

in theory?
Ans: Well, although most of it is the same as in theory but
one cannot make is fully Islamic in a setting where, like in
our country, the economy is full of foul interest-related
money which circulates in our economy including our
Islamic Banks.
The Islamic Banking is usually focused on helping the
people in need and is very flexible as compared to
Conventional banking. But this flexibility is usually
exploited by people like in Qard Hasana, people try to
avoid repayment of loans, and we are bound to not
pressurize them, which makes the collection process both
slow and inefficient. Moreover, in Car Ijarah, when we lease
the car to someone, we install a tracker in it (installation
costs borne by bank), and dont force customer to pledge a
considerable security for it as a collateral with the bank. It
is only 10% of the cost of the vehicle, which lowers our
operating revenues. Also the processing charges are only
about 3000 rupees. Now these charges are not mentioned
in theory, nor any mechanism is devised for its
determination either, so we have to devise it on our own in
howsoever close to Sharia it could be.
Also we cannot get in to Musharika venture with clients for
House financing, whose income is less than 40000 per
month which is a shortcoming of Islamic Banking.
Then there is a bit confusion and controversy over whether
the Term Deposit certificates are halal or not, as we deem
and consider them as Mudaraba instruments but critics say
its no different than riba.