Transcript
Presented by : Padmakar Tapal (B- )
Rupesh Nagwekar (C-30)
Nitin Pathade (C-31)
Amey Parab (A- )
Islamic banking refers to a system of banking or banking activity that is consistent with the principles of Islamic law (Sharia) . Sharia prohibits, (Riba, usury) . i.e, interest free business
The main objective of an Islamic Bank is to prohibit Muslims
from dealing with interest or usury (Riba) which has been
strictly prohibited by Allah, and to protect them from one of
the biggest sins
Dubai Islamic Bank Statement
Shari’ah Islamic law
Riba Interest
Hiba profit
Ta'widh Compensation
Ujrah Payment in exchange for services, benefits and privileges offered to the customers
Sukuk the Arabic name for financial certificates, but commonly refers to the Islamic equivalent of bonds
'Islamic banking opens job options' - Times Of India - 31 Jul 2012
Tweak laws to allow Islamic banking: RBI - The Times of India - 4 Oct 2012
'Islamic banking not feasible in India' - Indian Express - 27 Mar 2012
Islamic banking in India: Will it open a Pandora's box? Video: NDTV - 8 Jun 2012
Bank Client
money
money + money (interest)
Conventional
.
Bank ClientGoods & Services
money
Islamic
DIFFERENCE IN CONVENTIONAL BANKING BALANCE SHEET AND
ISLAMIC BANKING BALANCE SHEET
Assets LiabilitiesLoans and advances to customers Customers’ deposits
Cash and cash balances with other banks
Due to banks and other financial institutions
Investments in associates, subsidiaries andjoint ventures
Other liabilities
Financial assets held for trading Sundry creditors
Cash and cash balances with the central bank
Equity and reserves
Application of funding Sources of funding
Cash balances Demand deposits (amanah)
Financing assets (murabaha, salam, ijara,istisna)
Investment accounts (mudarabah)
Investment assets (mudarabah,musharakah)
Special investment accounts (mudarabah,musharakah)
Fee-based services (ju’ala, kafala, and soforth)
Reserves
Non-banking assets (property) Equity Capital
Shari’ah Islamic law
Riba Interest
Hiba profit
Ta'widh Compensation
Ujrah Payment in exchange for services, benefits and privileges offered to the customers
Sukuk the Arabic name for financial certificates, but commonly refers to the Islamic equivalent of bonds
Deposits available
• Riba as interest (differences among Muslims)
• Interest in all forms prohibited
• All interest-based transactions should be avoided
• Interest-based transactions are seen as ‘unjust’: risk on the borrower
Basic Framework:Prohibition of Riba
Islamic banks can give inclusive growth along with control over inflation.
Equity finance is extended by lower cost of credit.
It provides equitable share of profit.
It provides small amount of loans
EnglandHSBC, Lloyds TSB
Malaysia, Cambodia, SingaporeCIMB
CanadaRoyal Bank of Canada
Banks with Islamic Portfolios
Islamic banking being a young concept can help development of poor economy.
Though having few draw backs it has its own advantages to stand on.
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