1. Suppose a friend of yours asks you about Islamic banking and he does not believe in Islamic banking because Islamic banks use KIBOR in taking profitwhich is the benchmark of conventional banks and moreover Islamic Banks also receive extra money from thier customer in case of delay of his payment.So how do you satisfy your friend by answering these questions?
2. Suppose you are a branch manager of an Islamic bank. A customer who owns a garment factory comes to you and wants to purchase cotton from market for making the garment for which he asks your bank for Rs. 5 million for one year.

Required:

1. How will you meet this requirement according to the procedure used in Islamic Bank?

Write down all these procedures step by step.

2. If your bank wants to earn 10 % annual profit on Rs.5 million and the purchase of cotton has cost Rs.50,000 then how will this profit be calculated?

3.Mr. Javaid approached Islamic Bank to purchase a house built at DHA Phase VIII on 1,000 sq yards. The total value of the house is Rs. 25 Million. He only has 04 Million and wants Islamic Bank to invest the rest, which Islamic Bank agrees.

Mr. Javed agrees to purchase the Islamic Banks's share in the house in 05 years' time on a monthly basis. Profit rate is 14%.

Required:

1. What mode of finance will be used in this case? Write down the all steps and agreements which will be involved in this transaction.