Islamic banking Theoretical model

Prohibition of Riba.

Importance of Bank in modern world of business

Dilemma is how to restructure banking system in

order to conform to the requirements of muslim
world.

Islamic resurgence movement from 1970s onward.

The council of Islamic ideology - Recommendations

Submission of provisional report to government for

the elimination of Riba from economy.

Financing modes permissible in Shariah.

Musharakah

Mudarabah

Bai-Muajjal

Bai-Salam

Ijara

Hire-Purchase Agreement

Murabaha

Provision of Services on commision

Commercial banking in Islamic

Perspective
Model

of Islamic banking consit of two-tier

Mudarabah system.

1)

Depositor Liability Side

2)Asset

Side (Mudarabah or Musharakah)

Different Views of Economist

Pessimistic
Optimistic

Central Banking and Monetary

Policy

How the central bank of an islamic economy would

control credit and implement its policy in the absence
of the institution of interest.

Three major Objectives of monetary policy

1)stability in the value of money

2)economic prosperity with full employment

3)promotion of distributive justice

Islamic Banking Practice

Summit conference in Mrocco 1969.

Islamic Development Bank Jeddah S.A 1973.

Interest-Free Banking in Pakistan ( 1981)