1. Islamic Banking- Al Bilad Bank
Special Topics in Finance (FINA 4351)
Section: 201
Jumana Al-Umran/ ID:

2. Outline
Introduction
Existing position/conditions of global Islamic banking
Condition of Islamic banking in Saudi Arabia
A brief review about Albilad bank
Role of Shari’a in the formation of products
Albilad’s deposit products
Albilad’s loan products
My comments on these products

3. Introduction
Islamic banking refers to a banking activity or a system of banking that is in compliance with Shari’a (rules and values set by Islam).
Islamic banking was first introduced in Egypt in the 1960s.

4. Existing position/conditions of global Islamic banking
The dramatic current changes give more incentive for Islamic banking to grow.
Example of Arab Spring
Two essential themes that are important for the structure and sustainability of Islamic banking are starting to emerge:
Excellent banking operations
Product innovation

5. Condition of Islamic banking in Saudi Arabia
Saudi Arabian banking sector has the largest assets base among Islamic as well as conventional banks within GCCs.
Conventional and Islamic banks are operating side by side in the market.
There are four listed Islamic banks in KSA: Al-Rajhi Bank, Aljazira Bank, Al- bilad Bank and Alinma Bank.
The Saudi Arabian Al-Rajhi Bank maintained its position as the world’s largest Islamic bank by the end of 2010.

6. A brief review about Albilad bank
A Saudi joint stock company
Established on November 4, 2004 with a corporate capital of 3,000,000,000 Saudi Riyals
Its Head Office is located in Riyadh
Offers banking products and services on all levels and segments

7. Role of Shari’a in the formation of products
Shari’a Board
Preparatory Committee
Shari’a Group
The Shari’a Board Secretariat Department
Shari’a Audit Department
Research and Development Department

8. Albilad’s deposit products
Savings accounts
Current accounts
Albilad accounts

9. Albilad’s loan products
Murabaha finance
Finance by musharaka
Istisna'a and back-to-back istisna'a finance
Securitization finance

10. Murabaha finance

11. Musharaka financing
The bank becomes a partner by providing the required funds.
Profits and losses
Equity contribution
Management

12. Istisna'a and back-to-back istisna'a finance
First, the customer requests a certain product from the bank that needs to be manufactured, built, or assembled at a specific price. Second, the bank enter into a contract with the customer that specifies the date the bank will deliver the product to the customer and the price the customer will pay Third, the bank enter into a back-to-back Istisna'a contract with a third party to have the product manufactured, built or assembled.

13. Securitization finance
The purpose of Securitization finance is to finance contracting sector to provide the liquidity needed for development projects by offering financing options that are in compliance with Shari’a rules and principles.

14. My comments on these products
Savings accounts, current accounts, Albilad accounts, and finance by musharaka have no doubt in their permissibility because in these products, there is no riba and gherar.

15. My comments (cont.) Murabaha finance
“Allah permitted trade and forbidden usury” (Surah Al- Baqara, verse 275)
Istisna'a and back-to-back istisna'a finance
Securitization financing

16. Thank You for Listening

17. References
Assl, N. K. (2012). Islamic finance flourishing in wake of Arab Spring. Retrieved December 11, 2012, from Spring.aspx
Albilad’s employer, personal communication, 2012.
Bank Albilad. (n.d.). Albilad account, auto financing, murabaha finance, finance by musharaka, Istisna'a and back-to-back istisna'a finance, securitization finance, about the bank, and sharia board. Retrieved December 11, 2012, from
Ernst & Young. (2012). World Islamic banking competitiveness report Retrieved December 11, 2012, from f?bcsi_scan_F40B836301B5827A=0&bcsi_scan_filename=IBCRReport2011(LR)%20Final.pdf
Emirates 24/7. (2011). Saudi Al-Rajhi remains biggest Islamic bank. Retrieved December 11, 2012, from

18. References (cont.)
Islamic Banking and Finance. (n.d.). A roundup of the latest news and developments in Islamic finance. Retrieved December 11, 2012, from Islamweb. (2011). Slam contract. Retrieved December 11, 2012, from Saud, B. S. (2011). Performance analysis of Islamic banking: Some evidence from Saudi Arabian banking sector. Retrieved December 11, 2012, from cube.ritsumei.ac.jp/bitstream/10367/2589/1/Bintawim%20Samar%20Saud%20S..pdf?bcsi_scan_F40B B5827A=0&bcsi_scan_filename=Bintawim%20Samar%20Saud%20S..pdf Shhatah, H. [nagoom]. (2011, December 30). Fadihat albnook aleslamiah rabawiah wlaken begna'a almurabaha [Vedio file]. Retrieved from The Islamic Banker. (n.d.).Introduction to Islamic banking. Retrieved December 11, 2012, from Zakaria, M. H. (2012). Kingdom gaining more clout in Islamic finance. Retrieved December 11, 2012, from