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  • Islamic Banking Versus Conventional Banking - Final

    Încărcat de

    Mariyam Abbasi
    51 vizualizări19 pagini
    Islamic Banking is a form of partnership in which all partners contribute in form of cash and assets. The customer and the bank share the risk of any investment on agreed terms, and divide any profits or losses between them. There were no major effects on Islamic banking, however, the profitability did come down after Dubai Crises.

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    Islamic Banking is a form of partnership in which all partners contribute in form of cash and assets. The customer and the bank share the risk of any investment on agreed terms, and divide any profits or losses between them. There were no major effects on Islamic banking, however, the profitability did come down after Dubai Crises.

    Drepturi de autor:

    Attribution Non-Commercial (BY-NC)
    Descărcați ca PPTX, PDF, TXT sau citiți online pe Scribd
    Indicator pentru conținut neadecvat
    51 vizualizări19 pagini

    Islamic Banking Versus Conventional Banking - Final

    Încărcat de

    Mariyam Abbasi
    Islamic Banking is a form of partnership in which all partners contribute in form of cash and assets. The customer and the bank share the risk of any investment on agreed terms, and divide any profits or losses between them. There were no major effects on Islamic banking, however, the profitability did come down after Dubai Crises.

    Drepturi de autor:

    Attribution Non-Commercial (BY-NC)
    Descărcați ca PPTX, PDF, TXT sau citiți online pe Scribd
    Indicator pentru conținut neadecvat
    din 19

    Presented By

    - Zeenat Khatri

    - Ahsan Ali Sultan

    1.

    Risk sharing - The customer and the bank share the risk of any
    investment on agreed terms, and divide any profits or losses between them

    2.

    No Interest/ Riba Cannot lend money to earn additional


    amount on it.

    3. 4. 5.

    Materiality - Real transaction must exist No exploitation - no exploitation of the contractual parties No financing for sinful activities activities forbidden by
    Islamic Law.

    Commercial Banking

    Islamic Banking
    Goods and Services

    Money

    Client

    Client

    Money +

    Bank

    Interest

    Bank

    Money

    There were no major effects on Islamic Banking. However, the profitability did come down after Dubai

    Crises.

    2oth century

    Criticizing capitalist economy


    Spreading of Islam Need for interest free banking

    Islamic Financial Institutes


    Islamic Development Bank

    From the late 70s onwards, Pakistan has a protracted

    history of Islamic banking. As from July 1st, 1985 all commercial banking in Pak Rupees were made interest free. The first Islamic bank license was awarded to Meezan Bank back in 2002 Some of the Islamic Banks of Pakistan
    AlBaraka Islamic Bank

    BankIslami Pakistan Limited


    Burj Bank Emirates Global Islamic Bank

    Individual Deposit Accounts

    Term Certificates
    Certificate of Islamic Investment Monthly Mudarabah Certifcates

    Ijarah
    Car Ijarah

    Business Deposit Accounts


    Karobari Munafa

    Business Plus

    Sharia Based
    Musharka Mudarba

    Sharia Compliance
    Murabaha Ijara Diminishing Musharka Bai Salam Bai Muajjal Istana

    Murabaha
    Cost Plus sale contract Profit usually linked with KIBOR Disclosure of cost Sale must be instant Deferred Payment

    Ijarah
    Rental Contract Ownership Risk borne by bank Rent is linked with KIBOR

    Bai Salam
    Sale Contract Delivery of product at Future date

    Bai Muajjal
    Similar to Murabaha Only difference is that the cost of product is not disclose

    Istana
    Sale contract Existence of subject matter

    Mudaraba
    A form of partnership in which one partner provides the fund and other his labor. Two types of Mudarabah Al-Mudarabah-Al-Muqayyada Al-Mudaravah-Al-Mutlaqah

    Musharaka
    A joint enterprise in which all partners contribute in form of cash and assets Sleeping partner cannot get more than his percentage of investment.

    Diminishing Musharaka
    Type of partnership between IFI and client

    ISLAMIC BANKING VS COMMERCIAL BANKING


    Islamic Banking Commercial Banking Concept of Money
    Medium of Exchange

    Its a commodity Interest vs. Profit Sharing

    They share profit & loss

    They charge you interest Risk Sharing

    Both Investor & entrepreneur bear the Only borrower bear it risk

    Islamic Banking Return varies Risk is share with depositors Murabaha Participation Term Certificate Bai Muajjal Istisna Musharaka Mudaraba Ijara Bai Salam Diminishing Musharaka

    Commercial Banking Deposit Fixed return No sharing of risk with depositor Financing Credit Cards Overdraft Short-term loan Working Capital Financing Receivable Discounting Financing for Inventory Personal Loans Medium term Loan Long term Loan Leasing Agricultural Loans House Financing etc

    Islamic Banking

    Commercial Banking
    Investment

    Cannot invest in government, companies bonds etc Not free to Invest in Equity KMI Skuks Bonds Can Invest in Islamic Mutual Funds

    Can invest in government, companies bonds, equity, mutual funds etc

    Punishment for Delay in Payment Penalty Interest Relationship with Clients Investor & trader, buyer & seller Creditor & debtor

    Challenges
    Legal Support Benchmark Islamic banking Laws Lack of public awareness Lack of standard

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