Professional Documents
Culture Documents
Name
Bank Management
ID
Bai Al Inah
Malaysian people between the ages of 18 and 55 years (58 years old -
government employees only)
Buyer and seller: In cooperation parties must have complete capacity, which means
that they have reason and discretion.
Price: The price must be set on the spot and must be known to the buyer.
Subject matter: The subject matter should be lawful and owned by the seller, it should
be deliverable, and should be precisely determined at the time of contract.
Offer and acceptance: The form of the contract must comprise an offer from one party
and an acceptance from the other. Moreover, is necessary that the acceptance must
conform to the offer in all its details.
Bai-Salam
The term Bai-Salam has been derived from Arabic words (Baiun and Salamun). Bai-
Salam means advance purchase and sale. Bai-Salam may be defined as a contract
between a Buyer and a Seller under which the Seller sells in advance the certain
commodities/products permissible under Islamic agreement.
Feature
Bai Bithaman Ajil is a deferred payment sale, which works like a Murabahah contract,
but with payment generally made on a deferred basis. In some countries Bai Bithaman
Ajil is also known as Bay al Muajjal (Pakistan) or Bay Muazzal (Bangladesh). As partial
security, the correspondent bank would, on adding his confirmation, debit the Islamic
banks with a certain cash margin which it will transfer immediately to its own account.
(They are authorized to do this automatically). Thus Islamic banks need in fact, only to
keep sufficient balances in their correspondent banks account to cover the cash
margins of the letters of credit and not the whole value of these letters.
Islamic banks, however, may ask a correspondent bank to add their confirmation to
letters of credit opened on behalf of foreign suppliers to importers.. Either Islamic bank
keeps huge surpluses in their account with the correspondent bank to cover its
obligations to the third party while it seeks to replenish its account with the
correspondent bank. This in fact would be lending by the correspondent bank for which
Islamic banks would not accept to pay any interest. Foreign banks accepted dealing
with Islamic banks on the basis of mutual agreements advised and accepted by simple
exchange of letters to avail Islamic banks with confirmation facilities up to an agreed
ceiling without charging interest should the accounts go red. In consideration, Islamic
banks undertake to abide by the following:-
All types of money transfers Domestic as well as international bank transfers are
offered.
Collection of bills (but not their discounting).
Letters of credit and guarantees all forms of letters of credit and letters of
guarantee. Islamic banks charge fees for these services. This is permissible in
Islam.
Safes Safe custody services are also available in some Islamic banks.
The most important facilities and features of founding Islamic bank in Bangladesh and
all over the world are to support, temporary and cultivate the claim of Islamic main
beliefs in the business sector. More in detail, the facilities of Islamic banking when
observed in the framework of its role in the economy are listed as following:
Conclusion
It give the impression from the overhead characterizations that Islamic banking is a
system of financial intermediation that escapes receipt and payment of interest in its
transactions and behaviors its operations in a way that it helps succeed the objectives
of an Islamic economy. On the other hand, this is a banking system whose operation is
based on Islamic principles of transactions of which profit and loss sharing is a major
feature, ensuring justice and equity in the economy. That is why Islamic banks are often
known as profit and loss sharing banks.