The Islamic banking industry facilitates both consumer and corporate clients by providing needed capital through different modes of financing. The prerequisites of financing the corporate clients are generally different from that of the individual customers. This study discusses a detailed narrative of how a corporate customer, Sufi oil, availed financing from Bank Islami through ijārah mode of financing in a Sharī'ah compliant way. It discusses step by step procedure of dealing with corporate client starting from the first stage when a representative of the firm visited the Bank Islami and discussed the firm needs and the possible procedure and mode of financing. The study provide a comprehensive insight in the internal procedures involved in evaluating each and every client. Different branches and their respective role and responsibilities at the branch level and their interaction with the Head Office have been highlighted. The study has also briefly discussed various risks that may encounter the transaction and the manner in which the perceived risks have been mitigated. The focus of the study is to differentiate the corporate ijārah from the consumer ijārah in terms of both documentation and procedure. The repayment schedule for the case is also described in detail along with the rent that the Bank Islami would be getting by leasing any vehicle to the corporate entity.
Providing its services in accordance with the principles of Shariah and maintaining the trust of stakeholders is essential for the existence of Islamic financial institutions. Islamic banks should be run under an integrated and regulated standard system called Shariah Governance Framework (SGF) The SBP, AAOFI and IFSB have proposed separate governance frameworks, However, the framework issued by the SBP is characterized by the fact that external Shariah audit is an important component of it which to ensure the independent and sovereign accountability of Islamic financial institutions. This means that Islamic financial institutions will no longer be content with internal sources such as internal Shariah audits and reviews to verify Shariah compliance, but will necessarily have to verify it with a third external party called an external Shariah audit. But after the mandatory implementation of this type of audit in Pakistan, there are many problems such as disinclination of experts, uniformity in the duration of audit and burden of responsibilities, non-standardization in the affairs of Islamic financial institutions, lack of precautionary measures taken by regulators, lack of curriculum and proper training, lack of detailed framework or format and lack of career counseling etc. This research paper covers these difficulties in the light of expert opinions.
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