Journal of Islamic Business and Management

Deposits Pool Management in Islamic Banks in Pakistan: A Case of Term Deposit Recipts (TDRs)

Umar Saeed, Muhammad Ismail & Gohar Saleem

This narrative study reports and analyses deposits pool management in Pakistan, which is an important fund raising instrument used by Islamic banks. The study exemplifies and discusses a complete process starting with the account opening, and its placement in the banks balance sheet, followed by the common pool creation process. It also discusses the role of bank as investor, in addition to a pool manager, and distribution of profits between the the bank and the pool and then among various investors within the pool using the daily average product and the weightages mechanism. Profit Equalization Reserve (PER) and investment Risk Reserve (IRR) are discussed in the context of their respective Shari‘ah basis, to develop an overall understanding of term deposit receipts of Islamic Banks.


Islamic Banks, Term Deposit Receipts, Mudarabah, PER, IER