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Purpose
This white paper highlights the experience and competency of Path in providing a solid
integrated IT Solution, iMAL*IslamicTreasury, for the management and processing of
the Islamic investment and financing products throughout their entire life cycle.
Islamic economy
Islamic economy is based on completely different considerations than Western economy.
It is based on Shariah, the Islamic law, which governs secular as well as religious activities. The
basic objective of Shariah is to ensure general human well-being and socio-economic justice.
It teaches that all wealth belongs to Allah and that humans are merely trustees of this
wealth-entrusted with it to realize the above-mentioned objectives. Individuals do not have
absolute right over their wealth. They must not wastefully consume their wealth, and they must
give to others their due.
One of the main aims of Islamic economy is that wealth, instead of becoming concentrated in the
hands of a few, should be allowed to circulate in society as widely as possible, so that the gap
between the rich and the poor is narrowed as far as naturally practicable.
In the Western economy, the individual has unconditional and absolute rights over wealth and is
allowed to use it as he or she pleases.
Because Islam is the basic concept on which Islamic banking is built, moral principles
and objectives play a more important role in the operations of an Islamic bank than in a
non-Islamic bank.
An Islamic bank offers non interest-bearing products or services, and is more oriented
towards risk-sharing.
In their organizational structure and corporate governance, Islamic banks have an Islamic
Sharia board, to ensure that the banks practices are in line with the Sharia regulations.
Because of these elements, Islamic banks have the characteristics of investment banks,
commercial banks and development banks.
Islamic modules are especially designed and geared towards Islamic Principles
application.
Islamic systems should allow full management of Islamic products from inception to
closure of the deals, i.e.:
Efficiency in processing transactions coupled with internal controls and limits
monitoring
Effectiveness in assessing, controlling and managing credit and liquidity risks
Speed in on the counter service (Time To Market)
Flexibility for management of new and innovative products
Off balance sheet accounting:
- In conventional banks off balance sheet accounting is limited to L/Cs and L/Gs
- A bank applying Islamic products needs control procedures and positions
monitoring of the bank and the clients funds
Catering for the more complex profit calculation methods.
Distinguishing Path
It is a fact that many aspects of the Islamic economy differ greatly from those of the Western
economy.
Path has explored the typical risks undertaken by Islamic banks and has supported all the aspects
of Islamic banking. As wee, Path has great expertise in Islamic Banking & Funds Management,
and has gained extensive business Know-How; so No learning curve.
Path has introduced iMAL*IslamicTreasury a Software System which handles all forms of
Islamic Financing, Treasury and Investment transactions for the banks own account .
In the preparation of this document, every effort has been made to offer the most current, correct, and clearly expressed
information possible. Nonetheless, inadvertent errors can occur, and business conditions often change.
Further, the information in the text is intended to afford general guidelines on matters of interest to readers. The
application and impact of the information can vary widely, however, from case to case, based upon the specific or
unique facts involved. Accordingly, the information in this document is not intended to serve as professional advice.
Path Solutions has no obligation to tell you when information in this document changes or when the document is
updated.
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