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.