Professional Documents
Culture Documents
Investment
Participation
worshipping.
Savings operations in Islamic Finance
Do not differ with conventional that system
focus all efforts on class of savings.
It does not care about size of savings that is
are prohibited.
Savings are invested on Profit &
Loss Basis.
Restricted saving products
available .
Limited number of financial
institutions.
Saving cannot be invested in
one of investors.
Profit portion of every investor from
the profit determined
Every investor obtains his portion of profit
according to agreed terms as regards to investing
operations.
By mixing of total fund participated or deposited by
the investor in the bank to the time:
For the period in which the fund has being invested.
Mixing leads to a fair distribution as regards the
share of investors from profits distributor.
Is it possible that the result of
investment is a loss
Chance may be there that the Islamic Bank for the
sake of eliminating the possibility of loss from
investment operations.
Keeping such possibility there are ways to keep
investors secure and in banking provisions are made
for the purpose of safeguarding such possibilities by
way of .
Technical pre- study of the investment
projects before their execution.
The qualitative and geographical
distribution of investments.
The refusal of conditional investment
in a certain project that have whole
operations of is a distribution of risk.
Formation of appropriate provisions
and reserves
Forming appropriated provisions &
reserves.
Provision or reserve is a part of profit that is put
aside to encounter probable loss or to
strengthen the financial standing.
The reserve is of the right of the profit owner
from which the reserve is deducted.
Reserve or provision made to encounter losses
and are deducted from investment profits
before distribution.
Reserve are the right of investors and the bank
(participators) together.
Investor is not a permanent and may finish his
participation is a natural matter.
Casual problem is seen on withdrawal
In order to investment operations without
disputes, the bank make a reserve or an
investment provision from the proportion the
bank charges in return for its efforts and for
managing investments.
Therefore this reserve is employed to encounter
any emergency and the balance is still be owned
by the bank.