Islamic Banking at National Bank of Pakistan
NBP is proud to expand its range of products and services to include Shariah Compliant Islamic Banking products, now available at our dedicated Islamic Banking Branches at Karachi, Lahore and Peshawar.
ISLAMIC BANKING MISSION
“To become a leading player in the growing field of Islamic Finance in Pakistan and abroad, providing depositors and shareholders in a truly SHARIAH COMPLIANT way, the best combination of returns and future growth”
ISLAMIC BANKING VISION
To set standards of best practices and performance through efficient asset allocation, and offer / develop products based on the true spirit of Islamic finance.
PRODUCTS AND SERVICES AVAIABLE AT ISLAMIC BANKING BRANCH
Products and services being offered by our Islamic Banking Branch are fully Shariah Compliant and have been certified by NBP’s Shariah Advisor.
• Highest standards of Integrity • Institutionalizing team work and performance culture • Excellence in service • Advancement of skills for tomorrow’s challenges • Awareness of social and community responsibility • Value creation for all stakeholders
To enhance profitability and maximization of NBP share through increasing leverage of existing customer base and diversified range of products.
Bank’s Management has established and is managing an adequate and effective
system of Internal Control which encompasses the policies, procedures processes and tasks as approved by the Board of Directors that facilitate effective and efficient operations. The management and the employees at all levels within the bank are
required to perform as per these approved Internal Control System components. The Internal Control System ensures quality of external and internal reporting, maintenance of proper records and processes, compliance with applicable laws and regulations, and internal policies with respect to conduct of business.
The management ensures that an efficient and effective Internal Control System is in place by identifying control objectives, reviewing existing procedures and policies and ensuring that control procedures and policies are amended from time to time wherever required.
However, Internal Control system is designed to manage rather than eliminate the risk of failure to achieve objectives and provide reasonable but not absolute assurance against material misstatement or loss.
Evaluation of Internal Control
The Bank has an independent Internal Audit & Inspection function in the name of Audit & Inspection Group with three Audit Offices that conduct audit of branches, Regions and Groups at Head Office on an on-going basis to evaluate the efficiency and effectiveness of Internal Control System. In addition to that Compliance set up is also in place with 130 independent Branch Compliance Officers in category III Branches and 28 Regional Compliance Officers and a Branch Compliance Officer in Sub-region
Gilgit with supporting staff to take care of Compliance related issues to strengthen the control environment.
For the year 2010 the Bank has made its best efforts to ensure that an effective internal control system continues to perform in letter and spirit. The observations made by the external / internal auditors and SBP Inspection team in their respective audits / inspections are promptly reviewed and measures are taken by the Board, Board Audit Committee and management for rectification of such observations to safeguard the Bank’s interest.
We assess that the internal control environment is showing signs of improvement as compared to previous years. The Bank is endeavoring to further refine its internal control design and assessment process as per guidelines issued by the State Bank of Pakistan. Accordingly, Bank is making all possible efforts to improve the professional skills and competency level of staff through need based training programs.
I) The business and overall affairs of Islamic banking branches carried out during the year 2010 are in accordance with Shariah principles and also these affairs are in compliance with SBP Shariah guide lines. I found the activities
according to the guide lines issued by Shariah Advisor from time to time during the previous years and current year.
II) A number of new Ijarah, Murabaha and Diminishing Musharika transactions were executed successfully.
The profit and loss sharing scheme (PLS) was launched last year, During current year more categories were added to it. All PLS schemes were managed according to Shariah principles and the Shariah guidelines issued by the State Bank of Pakistan.
During the year, for the first time, special pools were created to match the special profit rates offered to the customers. The special pools were managed properly through proper documentations.
III) Any earnings that have been realized from prohibited sources or by declaring the transaction void (Fasid) have not been pointed out yet with the grace of Allah Taala. Islamic Banking Division received an amount of three million eight thousand three hundred and fifty rupees (Rs. 3,008,350) in charity account. This amount was distributed equally to the three approved charity organizations as per the policy of the charity.
IV) Islamic Banking Division appointed a Shariah Compliance Officer, and he
carried out a detailed Shariah compliance audit.
V) NBP also conducted a Shariah Audit during the year.
VI) The staffs of Islamic banking branches were trained during 2010 in Islamic
Banking and finance through comprehensive courses. Code of Corporate ate Governance The Bank has complied with the principles contained in the Code in the following manner.
1. The Board of Directors of the Bank is appointed by the Government of Pakistan (GoP) as per the provisions of the Bank’s (Nationalization) Act. 1974. At present all the Directors (Except for the President / Chief Executive who is also the Chairman of the Board ) are independent non-executive Directors, including the Director representing minority shareholders as required by the Code.
2. Directors have confirmed that none of them is serving as a Director in more than ten listed Companies including the Bank.
3. All the Directors of the Bank are registered as Tax Payers and none of them has defaulted in
payment of any loan to Banking Company, a DFI or an NBFI or being a member of Stock Exchange, has been declared as defaulter by the Stock Exchange.
4. During the year Two Directors Mr. Ibrar A Mumtaz and Mian Kausar Hameed Completed their tenure of directorship of three years on 30th March 2010, who were appointed in terms of Section 11 (III-A) of Banks Nationalization Act, 1974.Federal Government nominated Ms Nazrat Bashir in place of Mr. Muhammed Ayub Khan Tarin on 01-03-2010 as Director on the Board of National Bank of Pakistan.
5. The Directors have confirmed that neither they nor their spouses are engaged in the Business of Stock Brokerage.
6. The Bank has prepared “Statement of Ethics and Business Practice” which is already approved by the Board of Directors.
7. Board has approved the Vision, Mission, Core Values, Objectives and NBP Strategic Plan.
8. The Bank has comprehensive frame work of written policies and procedures on all major areas of Operations such as Credit, Treasury Operations, Finance, Internal Audit and Compliance, etc. Many of these policies have been approved by the Board and are being constantly reviewed.
9. There exists in the Bank a framework defining the limit of the authority of various Management levels. All the powers were exercised by the relevant authorities within the materiality thresholds.
10. All the Powers of the Board have been duly exercised and decisions on material transactions have been taken by the Board.
11. The meetings of the Board of Directors were presided over by the Chairman. The Board met
10 times during the year, written notices of the Board meetings, along with Agenda Credit & Risk Management
Risk management function has been restructured and made independent of all risk taking and approving units. Its functional reporting is to the Board of Directors and administrative reporting to the President of the bank. An executive risk management committee has been established to emphasize on the bank’s commitment to a robust risk management process and risk culture. In compliance with the risk management guidelines, issued by SBP, an operational risk management unit has been established. An operational loss database, risk & control self assessment (RCSA) exercise and key risk indicators (KRIs) are being developed and will subsequently be implemented. A separate credit risk architecture unit has also been formed for formulation/ proposition of credit risk strategies, policies, credit assessment methodologies, credit portfolio/sector management. A dedicated Basel II unit is responsible for managing the Basel II project in close coordination with the consultant and with the active support & involvement of other functions across the bank.
NBP CSR Division
Corporate Social Responsibility for a business entity is an out going commitment to behave ethically and contribute to economic development while improving the quality of life of the local communioty in which it is operating. It is about capacity building for sustainable development.
National Bank of Pakistan always remains committed to to exploring opportunities and avenues for uplifting people’s lives across all provinces. the bank’s CSR Program leaves no stone unturned in the of removing and reducing the challenges faced by individuals from different walks of life
NBP CSR Program revolves around the doctrine that there is more to come - ambitious plans, higher degree of commitment and a strong belief to make the nation one of the greatest in the world.
Being fully aware of its social obligations, it continues to proactively contribute towards social welfare, healthcare, education etc to help improve the quality of life for the underprivileged members of the country. In the last 6 months NBP’s social support activities were speeded up, and it also extended support to a number of charitable institutions to
• Up-Gradation Cardiology Care unit of GMC Hospital Sukkur Medical Camp at Gaddani, Baluchistan
• Medical Camp at Winder, Baluchistan
• Patients Welfare Society Shaikh Zaid Hospital
• Motivational Volunteer Empowerment Program (MOVE)
• Development of Computer Training Centre at Lyari
• Women and Child Welfare
• Distribution of Sewing machine to Destitute women
• Sponsorship - Development of Bus Waiting Areas (Women) at Sialkot
• Women Football & Hockey Coaching Camp.