The assessment provides the statistical evidence that the State Bank of Pakistan interest rate is also being affected by the Sukuk- backed Open Market Operations conducted by SBP for liquidity management of Islamic Banking Institutions through Bai’ Mua’jjal Transactions (in outright sale of GoP Ijara Sukuk to IBIs in order to mop up the excess liquidity) likewise OMS conducted by SBP for conventional banks which is contrary to Sharia compliant theme. Further, this paper analyzes the mechanism of Sukuk-backed Bai Mua’jjal transactions that statistically shows that (outright purchase of GoP Ijara Sukuk) does not affect quantum of money in circulation, as result OMOs effect is quite negligible on interest rate which also does not fulfill the purpose of OMO, rather it is merely accounting entries passed by SBP in the accounts of IBIS and GoP accounts maintained with SBP, for recording purpose. This study is based on Bai Mua’jjal transactions conducted by SBP during the period from Oct, 2014 to June, 2016 for facilitation of Islamic banking Institutions to manage their liquidity issues through Sukuk-backed OMOs and its impact on interest rates as a ratio to the total amount of OMOs conducted by SBP for conventional banks during the same period. This study emphasizes the need of a revision of Sukuk-backed OMOs being conducted by SBP for IBIs to manage their liquidity through Bai Mua’jjal transactions and emphasis on the need of proper monetary policy tools for this purpose. Keywords: Bal Mua’jjal, Open Market Operation (OMO), Repo, Reverse Repo, Outright Sale, Outright Purchase, Sukuk, policy rate/Interest Rate.

Zakah is the most important and beneficial system which plays key role as an instrument of financial system stability. According to this system, rich people have to pay Zakah at a certain rate in accordance with their income and wealth. This amount is then distributed among poor and needy people of the society to overcome their financial needs. This system was not properly managed in Pakistan due to which, financial system stability was lacking in the country. To overcome this problem, Zakah and Ushr Ordinance was promulgated in 1980 and the collection of Zakah was started through conventional and Islamic banks and Federal Board of Revenue (FBR). In 2009, Ministry of Zakah and Ushr was established which was responsible for this process in the country. However, under i8 Constitutional amendment in June 2011, Ministry of Zakah and Ushr was dissolved and this subject was transferred to all provinces of the country with the central control of Ministry of Religious Affairs. Since then, provinces are collecting Zakah through their respective departments and distributing it to the needy people of the society. Pakistan has 5 Provinces; Punjab, Sindh, Balochistan, Khyber Pakhtoonkhawa and Gilgit Baltistan. The current population of Pakistan is 197,200,000 and the population of Punjab Province is 100,590,000 which is 51% of total population of the country. Therefore, Punjab is the highest populated province of Pakistan. The budgeted allocation of Zakah of Punjab Province was Pak Rupees 3332.026 Million for the financial year 2014-15 which was increased to Pak Rupees 3415.00 Million in 2015-16 and to Pak Rupees 4147.464 Million for the financial year 2016-17. These funds are obtained from Federal Government, financial institutions, business organizations and individuals in the form of donations. Similarly, these funds are distributed on merit to the needy and poor people for their education, health, rehabilitation, marriages and daily life expenditures. Due to this process, the living standard of poor and needy people is increasing as this system is playing its key role for financial system stability in Punjab Province and in the whole country at large.

Keywords: Zakah, Collection, Distribution, Punjab Province, Pakistan

The objective of this paper is to initiate a debate on the issue of investment in and financing of the hotel business. The motive behind the discussion is the fact that the hotel business, as a stand-alone activity, is considered a Shari<ah non- compliant asset and is listed in the negative list in Malaysia. Hence, as a general Shariah rule, it is not allowed to invest in the hotel business or provide financing to it as a stand-alone entity. The case might be different if a hotel is subsidiary to a holding company, in case the holding company has a Shariah-compliant status. The revised Sharicah screening methodology (2013) by the Shariah Advisory Council (SAC) of Securities Commission (SC) Malaysia provides for a 20% benchmark being applicable to companies that generate part of their revenue or profit before tax from hotel and resort operations. Other screening methodologies like MSCI Global Islamic Indices do not allow investment in companies which are involved in or derive more than 5% of their revenue from such activities like hotels and cinemas. The same benchmark of 5% is applicable to hotels by the Russell-Jadwa Shariah Indexes. However, the present paper discusses the hotel business as a stand-alone entity and looks into its assessment and screening in the context of Malaysia which may have implication in other jurisdiction.

Keywords: Hotels, Shariah compliant, investment, Shariah screening, Index

The objective of the paper is to explore the performance of funds especially during crisis time period, impact of fund size on performance and rank funds on the basis of performance. For this reason, this study was conducted on Pakistan and Malaysia and performance is compared in both markets. Time span for the study is from January 2007 to December 2015. This whole time period covers global financial crisis as well, so performance was analyzed in bull and bear market. For performance measure, five different ratios are employed namely Sharpe ratio, Treynor ratio, Jenson Alpha, Sortino ratio, and Information ratio and for finding the link between fund size and fund performance, Pearson Correlation is employed and ranking of the markets is done by employing TOPSIS method. It is found that crisis is having direct impact on fund performance and that fund managers in both markets are risk averse most of the time, they are not performing well in comparison of market and performance in comparison of risk free securities is good in both countries and a negative link is found between fund size and fund performance. This study is contributive on literature on Islamic financing and is beneficial for the Muslim investors who don’t prefer conventional financial products due to religious reasons.

Keywords :Performance, Islamic Mutual Funds, Pakistan.

This research covers the prevailing liquidity risk management situation in Pakistani banking system keeping in view the comparison of Islamic and Conventional banks in operation in Pakistan. Four Islamic and five Conventional Banks were chuseti as sample out of all banks working in die industry. The annual financial statements of these banks were the source of secondary data for thirteen years starting from 2004 to 2016. Using co-relation, descriptive and multiple regression analysis, the results show that the Loan Quality and funding management has positive impact on Liquidity Risk management while Asset Quality has negative impact in case of Conventional Banking. For Islamic Banking, Asset Quality and Funding Management positively affect Liquidity Risk management while Loan Quality has negative impact on the same. Moreover the mean average value of financial ratios used as measuring tool for these variables show that performance of Islamic Banks is better than Conventional Banks operating in Pakistan. The research results will enable bankers, investors, academicians and policy makers to form a solid Conception and make useful advances in their consideration regarding banking industry progress.

Key Words: Liquidity Risk Management, Islamic Banking, Pakistan

In Islamic banks, deposits are the main source of funds which are converted to investment and assets to generate profit through Islamic Modes of financing and investment. There is limited research, especially in Pakistan, where the impact of deposits, investments, and total assets on performance is investigated for Islamic Banks along with the analysis of growth of Islamic Banking since its inception. The purpose of this paper is to fill this gap. Quarterly data of 10 years (2007 to 2016) published by the State Bank of Pakistan is applied for descriptive statistics, correlation and regression analysis. Assets while data from 2003-2016 is used for growth analysis. Assets, Investments, and deposits are used as independent variables while ROA and ROE are used as dependent variables. The results show that although there is a robust growth in deposits, investment, assets, and branch network of Islamic Banks during the study period, the profitability is not very impressive. This is evidenced from the negative relationship of assets with performance. However, the relationship of deposits and investment & financing is significantly positive with performance. Therefore, the Islamic Banks’ management should pay attention towards improving the efficiency by managing assets more prudently and by reducing costs, particularly the operational cost.

Key Words: Islamic Banks, Assets, Deposits, Investment & Financing, Financial Performance

This paper is an attempt to analyze the criticism leveled against Islamic banking in terms of fulfillment and protection of Maqasid or objectives. In the beginning, a brief introduction of Maqasid has been provided followed by its importance and position in Islamic principles of jurisprudence. In Islamic principles of jurisprudence, the Maqasid e Shariah are not an independent source of Shariah to use as a tool to derive the Islamic rulings or to check the status of any practice in terms of its permissibility or otherwise. Instead, the MS are the wisdoms which have been taken care of by Shariah in its rulings related to all the aspects of life. Different segments of a society have different and precise responsibilities towards fulfillment of MS and one particular segment cannot be held responsible for fulfillment of all the five objectives of Shariah. The practices of Islamic banks should be measured in terms of their full compliance with the principles of Shariah related to protection of wealth. Once the Shariah contracts are complied in letter and spirit, the MS shall be met as these contracts are prescribed by Shariah for the very purpose of fulfillment of MS. The article is concluded with recommendations on including the Zaroorah, Hajah and Urf in research areas of Islamic Banking.

Key Words: Maqasid e Shariah, Maqasid, Islamic banking