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    Chapter 05: Overall Evaluation of Investment Policies of Sibl

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    This document outlines important legal documents used in banking like promissory notes, letters of guarantee, and hypothecation. It then discusses Social Investment Bank Ltd.'s investment policies and strategies, noting they are based on Islamic principles overseen by a Shariah Council. The strategies discuss balancing return and risk, generally preferring higher returns with same or lower risk. Finally, it lists several types of discouraged business, including those prohibited by Shariah, affecting social values, related to weapons or mining, speculative investments, or involving defaulters or sanctioned countries.

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    Chapter 05: Overall Evaluation of Investment Policies of Sibl

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    kuashask2
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    This document outlines important legal documents used in banking like promissory notes, letters of guarantee, and hypothecation. It then discusses Social Investment Bank Ltd.'s investment policies and strategies, noting they are based on Islamic principles overseen by a Shariah Council. The strategies discuss balancing return and risk, generally preferring higher returns with same or lower risk. Finally, it lists several types of discouraged business, including those prohibited by Shariah, affecting social values, related to weapons or mining, speculative investments, or involving defaulters or sanctioned countries.

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    This document outlines important legal documents used in banking like promissory notes, letters of guarantee, and hypothecation. It then discusses Social Investment Bank Ltd.'s investment policies and strategies, noting they are based on Islamic principles overseen by a Shariah Council. The strategies discuss balancing return and risk, generally preferring higher returns with same or lower risk. Finally, it lists several types of discouraged business, including those prohibited by Shariah, affecting social values, related to weapons or mining, speculative investments, or involving defaulters or sanctioned countries.

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    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    34 views3 pages

    Chapter 05: Overall Evaluation of Investment Policies of Sibl

    Uploaded by

    kuashask2
    This document outlines important legal documents used in banking like promissory notes, letters of guarantee, and hypothecation. It then discusses Social Investment Bank Ltd.'s investment policies and strategies, noting they are based on Islamic principles overseen by a Shariah Council. The strategies discuss balancing return and risk, generally preferring higher returns with same or lower risk. Finally, it lists several types of discouraged business, including those prohibited by Shariah, affecting social values, related to weapons or mining, speculative investments, or involving defaulters or sanctioned countries.

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    03.06.

    Important Legal Document

    Some important legal documents are given below:

     Promissory Note
     Demand Promissory Note Delivery Letter >- Letter of Disbursement
     Letter of Installment
     Letter of Guarantee
     Letter of Continuity
     Pledge of MTDR
     Letter of Hypothecation
     Letter of undertaking
     HPSM Agreement
     Balance Confirmation Letter

    Chapter 05: Overall Evaluation of Investment Policies


    of SIBL

    Islam is our religion and all our banking activities are not away from Islamic Principles. Social
    Investment Bank Ltd. started its journey based upon the basic concept of Islamic Shariah.
    Shariah Council is active and vigilant over the day-to-day activities of the Bank being conducted
    strictly in line with the Islamic Principles.

    Strategies:

    Risk is the investments and returns thereon are interrelated. An investment Policy that
    emphasizes a high return must accept relatively high risk. Conversely, an Investment Policy that
    will tolerate only small amount of risk must be prepared to accept a relatively low return.

    As such, it is really difficult whether to select a high return portfolio with high risk or low risk
    portfolio with a low return.
    Nevertheless, considering all aspects following guidelines shall be followed as strategy for
    Bank's Investment:
    I. If two portfolios have the same risk but different returns, the portfolio having higher
    return shall be preferred.
    II. If the two portfolios have the same expected returns, but different returns, but
    different degree of risk, the portfolio having lower degree of risk shall be preferred.
    III. If one portfolio has both higher return and low risk than another, the first portfolio
    shall be preferred.
    IV. Keeping in view the risk factor, the Bank shall maintain flexibility In determination
    of rate of return on investments on case to case basis In consideration of the risk
    element involving in the respective investments i.e., higher rate of return or taking
    higher degree of risk a comparatively low rate of return for asking lower degree of
    risk.

    Discouraged Business Types:

    SIBL will discourage following business types:

     The type, which is prohibited by Shariah.

     Directly of indirectly affect social/normal values.

     Military Equipment! Weapons Finance Highly Leveraged Transactions.

     Finance of Speculative Investments

     Logging, Mineral Extraction! Mining, or other activity that is ethically or

    environmentally sensitive.

     Lending to companies listed on CIB black list or known defaulters.

     Counter parties in countries subject to UN sanctions.

     Share lending

     Taking an Equity Stake in Borrowers.

     Lending to holding companies


     Bridge loans/ investment relying on equity/ debt issuance as a source of repayment.

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