ISLAMIC BANKING IN INDIA

2011
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OM NAMAH SHIVAY

INDEX

S.NO PARTICULARS PAGE NO.

1. INTRODUCTION 3.

2. WHAT IS ISLAMIC BANKING 4.

3. ORIGIN OF ISLAMIC BANKING 5.

4. COUNTRIES USING ISLAMIC BANKING 10.

5. SHARIAH PRINCIPLES IN ISLAMIC BANKING 12.

6. PRINCIPLES OF ISLAMIC BANKING 13.

7. TERMINOLOGIES USED IN ISLAMIC BANKS 13.

8. ISLAMIC DEVELOPMENT BANK 18.

9. ISLAMIC BANKING IN PAKISTAN 19.

10. ISLAMIC BANKING IN MALAYSIA 21.

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BANKING SECTOR

Banking sector has undergone tremendous changes throughout these years

by fulfilling the dreams of thousands of people all over the world. Banks
have provided a lot of opportunities for the public not only as a mediator
but also as a service provider. It has built a bond with the people with a
handful of services. Even every country's financial security id vested in the
hands of the central bank of that country. The banking sector has made a
trust in the common people by giving out services starting from lending
loans for different activities to being as a security locker of money.

But in India only 40% of the people only have tasted the sweetness of the
facilities of the banks. Still the marginalized 60% haven't got chance to go
through the entire banking process. These downtrodden groups are keeping
themselves away from the banking procedures because of the huge interest
imposed by the banks. A grand welcome will be made to those initiatives
taken, which would act in a friendly manner by providing interest free
banking facilities would make these marginalized groups also to be a part of
the banking sector. An interest free banking system is functioning
successfully around the globe. This banking system is called Islamic Banking.

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INTRODUCTION

The Islamic banking today has become most popular and reliable financial
system in the world. It appeared in the world scene as active players over
three decades ago. But as many of us know most of the principles which is
based on the Islamic banking, commonly accepted by all over the world goes
for century then decades. Islam as a religion very clearly prohibits the Riba-
the interest, so the basic principle of Islamic banking is the prohibition of
Riba (interest) base transactions.

Islamic banking system has emerged as a competitive and a viable substitute

for the conventional banking system during the last three decades. It is
especially true for Muslim world where presently Islamic banking strides at
two separate fronts. At one side, efforts are also underway to covert the
entire financial systems in accordance to Islamic laws (Shariah). At the other
side, separate Islamic banks are allowed to operate in parallel to
conventional interest based banks. Pakistan and Malaysia are the two good
examples of above mentioned approaches. Additionally, Islamic law
prohibits investing in businesses considered unlawful (‘haram’) or contrary
to Islamic values. In recent years, Islamic banks have been created to cater
to the growing demand, driven by globalization and the vast wealth of some
Muslim states in Middle East and Southeast Asia, and Islamic finance has
moved from a niche position to become a mainstream component of global
banking system.
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What is Islamic banking?

Islamic banking refers to a system of banking or banking activity that is

consistent with the principles of Islamic law (Shariah) and its practical
application through the development of Islamic economics. Islamic banking
is carried out in accordance with the rule of Shariah which is known as Fiqh
Muamalat. It does not allowed to take Riba (interest) and create a great
degree of fairness and equality in the conduct of banking business

Islamic banking responds to the needs of Muslim customer, they are not
acting as religious institutions. Like other bank their main motive is to
maximize its profit but in case of the Islamic banking it is not there they act
as the mediator between the savers and investors and offer custodial
services which is found in other traditional banks. The major constraints
which are being faced by this bank (Islamic banks) are based on the
prescriptions in the Shariah law.

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ORIGIN OF ISLAMIC BANKING

Interest-free banking system seems to be very recent origin. The earliest

references to the reorganization of banking on the basis of profit sharing
rather than interest are found in Anwar Qureshi (1946), Naiem Siddiqi
(1948) and Mahmud Ahmad (1952) in the late forties, followed by a more
elaborate exposition by Mawdudi in 1950. The writings of Muhammad
Hamidullah 1944, 1955, 1957 and 1962 should be included in this category.
They have all recognized the need for commercial banks and their perceived
"necessary evil," have proposed a banking system based on the concept of
Mudarabha - profit and loss sharing.

In the next 20 years or you can say that in the next two decades interest-free
banking attracted more attention, partly because of the political interest it
created in Pakistan and partly because of the emergence of young Muslim
economists. Works specifically devoted to this subject began to appear in
this period. The first such work is that of Muhammad Uzair (1955). Another
set of works emerged in the late sixties and early seventies. Abdullah al-
Araby (1967), Nejatullah Siddiqi (1961, 1969), al-Najjar (1971) and Baqir-al-
Sadr (1961, 1974) were the main contributors. The early 1970s saw
institutional involvement.

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The Conference of the Finance Ministers of the Islamic Countries held in

Karachi in 1970, the Egyptian study in 1972, the First International
Conference on Islamic Economics in Mecca in 1976, and the International
Economic Conference in London in 1977 were the result of such
involvement. The involvement of institutions and governments led to the
application of theory to practice and resulted in the establishment of the
first interest-free banks. The Islamic Development Bank, an inter-
governmental bank established in 1975, was born of this process.

The first modern experiment with Islamic banking was undertaken

in Egypt under cover without projecting an Islamic image—for fear of being
seen as a manifestation of Islamic fundamentalism that was anathema to
the political regime. The pioneering effort, led by Ahmad Elnaggar, took the
form of a savings bank based on profit-sharing in the Egyptian town of Mit
Ghamr in 1963. This experiment lasted until 1967 (Ready 1981), by which
time there were nine such banks in country.

In 1972, the Mit Ghamr Savings project became part of Nasr Social Bank
which, currently, is still in business in Egypt. In 1975, the Islamic
Development Bank  was set-up with the mission to provide funding to
projects in the member countries. The first modern commercial Islamic
bank, Dubai Islamic Bank, opened its doors in 1975. In the early years, the
products offered were basic and strongly founded on conventional banking
products, but in the last few years the industry is starting to see strong
development in new products and services.

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Islamic Banking is growing at a rate of 10-15% per year and with signs of
consistent future growth. Islamic banks have more than 300 institutions
spread over 51 countries, including the United States through companies
such as the Michigan-based University Bank, as well as an additional 250
mutual funds that comply with Islamic principles. It is estimated that over US
$822 billion worldwide Shariah-compliant assets are managed according
to The Economist. This represents approximately 0.5% of total world
estimated assets as of 2005.According to CIMB (Commerce International
Merchant Bankers) Group Holdings, Islamic finance is the fastest-growing
segment of the global financial system and sales of Islamic bonds may rise by
24 percent to $25 billion in 2010.

The Vatican has put forward the idea that "the principles of Islamic finance
may represent a possible cure for ailing markets."

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LARGEST ISLAMIC BANKS

Iran, Saudi Arabia and Malaysia have the biggest Shariah-compliant assets.
Shariah-compliant assets reached about $400 billion throughout the world
in 2009, according to Standard & Poor’s Ratings Services, and the potential
market is $4 trillion.

In 2009 Iranian banks accounted for about 40 percent of total assets of the

world's top 100 Islamic banks. Bank Melli Iran, with assets of $45.5 billion
came first, followed by Saudi Arabia's  Al Rajhi Bank, Bank Mellat with
$39.7 billion and  Bank Saderat Iran with $39.3 billion. Iran holds the world's
largest level of Islamic finance assets valued at $235.3billion which is more
than double the next country in the ranking with $92billion. Six out of ten
top Islamic banks in the world are Iranian. In November 2010, The
Banker published its latest authoritative list of the Top 500 Islamic Finance
Institutions with Iran topping the list. Seven out of ten top Islamic banks in
the world are Iranian according to the list.

The development of Islamic banks in the world continue to experience

difficulties since the Islamic bank comes in the midst of development and
conventional banking practices that have been entrenched in society at
large. Constraints faced by banks (financial institutions) Shariah cannot be
separated from the unavailability of adequate human resources and
legislation. Although, many studies had tried to simplify the explanations of
the implementations of Islamic banking operations.

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This is considering that in each country, especially the majority Muslim

community, has no supporting infrastructure in Islamic banking operations
equally. Consequences developments in each country would have an impact
either directly or indirectly to the development of Islamic banking in the
world.

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COUNTRIES USING ISLAMIC

BANKING
There are many countries which are using Islamic banking and they are more
than 50 countries including United States through companies such as
Michigan based university banks as well as more than 250 mutual funds that
comply with the principles of Islamic principles.

There are 56 shareholding member states, on the basis of paid up capital,

the main shareholder of bank are from these countries:

Saudi Arabia

Libya

Iran

Egypt

Kuwait

Turkey

Qatar

UAE

Pakistan

Malaysia

Bahamas

Switzerland

Luxembourg

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Indonesia

Iraq

Uzbekistan

Bangladesh

Afghanistan

Yemen

Nigeria

Kazakhstan

And there are many more countries which are using Islamic principles.

The basic condition for membership is that the prospective member country
should be a member of the Organization of the Islamic Conference (OIC).
The economy of Organization of Islamic Conference (OIC) combines the
economies of other 56-57 members’ states that are using Islamic principles
or running Islamic banks. Those countries have a combined GDP (at
Purchasing Power Parity, {PPP}) of US$7,740billion. The richest country on
the basis of GDP per capita at PPP is United Arab Emirates. On basis of per
capita GDP,  Qatar is richest country with incomes exceeding US$108,000
per capita.

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SHARIAH PRINCIPLES IN ISLAMIC

BANKING

The rules and norms of Fiqh Muamalat emanated from two primary sources
of Shariah namely the Quran and the Sunnah and other secondary and
Authoritative sources of Islamic law.
Islamic banking operates under a number of contracts under Fiqh Muamalat.
Amongst the widely used concepts in Islamic banking include profit sharing
(Mudarabha), safekeeping (Wadiah), joint venture (Musharakah), cost plus
(Murabahah) and leasing (Ijarah).

SHARIAH COMMITTEE
Islamic banks and banking institutions that offer Islamic banking products
and services (IBS banks) are required to establish a Shariah Supervisory
Board (SSB) to advise them and to ensure that the operations and activities
of the banking institutions comply with Shariah principles. Each institution is
therefore required to set up a Shariah Committee to provide advice on
Shariah issues and to ensure that its operations and activities comply with
the Shariah principles. In Malaysia, the National Shariah Advisory Council,
which has been set up at Bank Negara Malaysia (BNM), advises BNM on the
Shariah aspects of the operations of these institutions and on their products
and services. In Indonesia the Ulama Council serves a similar purpose

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PRINCIPLES
Islamic banking has the same purpose as conventional banking except that it
operates in accordance with the rules of Shariah, known as Fiqh al-
Muamalat (Islamic rules on transactions). The basic principle of Islamic
banking is the sharing of profit and loss and the prohibition of Riba (usury).
Common terms used in Islamic banking include profit sharing (Mudarabha),
safekeeping (Wadiah), joint venture (Musharakah), cost plus (Murabahah),
and leasing (Ijarah).

TERMINOLOGIES USED BY ISLAMIC

BANKS

WADIAH (SAFEKEEPING)

For deposit product or Wadiah contract, a bank is the custodian and trustee
of funds. A person deposits funds in the bank and the bank guarantees
refund of any part or the whole amount of the deposit when requested by
the depositor. The depositor, at the bank's discretion, may be given 'HIBAH'

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(gift) as a form of appreciation for the use of funds by the bank. As a trustee
of the items, the custodian may charge a fee to the customer.

BAI' AL 'INAH (SALE AND BUY-BACK AGREEMENT)

Bai' al inah is a financing facility with the underlying buy and sell transactions
between the financier and the customer. The financier buys an asset from
the customer on spot basis. The price paid by the financier constitutes the
disbursement under the facility. Subsequently the asset is sold to the
customer on a deferred-payment basis and the price is payable in
installments. The second sale serves to create the obligation on the part of
the customer under the facility. There are differences of opinion amongst
the scholars on the permissibility of Bai' al ‘inah; however this is practiced in
Malaysia (A set of strict conditions must be complied) and the like
jurisdictions.

MUDARABAH (PROFIT SHARING)

Mudarabha is a profit sharing arrangement or agreement between a capital
provider and an entrepreneur or you can say it is a kind of partnership
where one partner gives money to other partner to invest in commercial
project or work which ever that person is starting. The investments is given
by the first partner and he is called ("rabb-ul-mal") and the other person
who manage a work or a person who takes the money and handle some
responsibility is called (“mudarib”) The entrepreneur is provided with funds
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by the capital provider to undertake a business activity. Any profits made

will be shared between the capital provider and the entrepreneur according
to the pre-determined profit-sharing ratio. However, losses shall be borne
by the capital provider.

MUSYARAKAH (JOINT VENTURE)

This concept is normally applied for business partnerships or joint ventures.

The profits made are shared on an agreed ratio while losses incurred, will be
divided based on the equity participation ratio. Musyarakah (joint venture) is
an agreement between two or more partners where each partner gives or
provides some funds so that so that it can be used in the venture. Profits and
losses are shared among them as I had said earlier. If a bank provides capital
same condition applies it is the financial risk, according to Shariah, that
justifies the bank’s claim to part of the profit. Each partner may or may not
participate in carrying out a business. A working partner gets a greater profit
then a sleeping partner. You can also come with the difference between.
Musyarakah (joint venture) & Mudarabha (profit sharing) in Musyarakah
each partner contribute some capital but in Mudarabha one partner
contribute, e.g. u can take. A financial institution, provides all the capital and
the other partner, the other partner, the entrepreneur, provides no capital

BAI' BITHAMAN AJIL (DEFERRED PAYMENT SALE)

The concept of Bai’Bithman Ajil refers to the sale of goods on a deferred

payment basis at a price, which includes a profit margin agreed to by both

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the parties. Like Bai' al 'inah, this concept is also used under an Islamic
financial facility. The problem in this is that this includes linking two
transactions in one which is forbidden in Islam.

BAI' MUAJJAL (CREDIT SALE)

Literally Bai’ muajjal means credit sales. Technically, it is financing technique

adopted by the Islamic banks that takes the forms Murabahah muajjal. It is
the contract in which the bank earns a profit margin on the purchase price
and allowed the buyers to pay the price of the commodity in future in
installments or in lump sum. In this the profit margin and cost should be
expressly mentioned on which the parties must agree. The price fixed for the
commodity in the transactions can be same as the spot price or higher or
lower than the spot price.

WAKALAH (AGENCY)

This is the situation when a person appoints a representative or delegates a

duty to another party to undertake transactions on his behalf. As an agent,
the bank will be paid a fee for the services it provided.

IJARAH THUMMA BAI' (HIRE PURCHASE)

There are two contracts involved in this concept: Ijarah contract

(leasing/renting) and Bai' contract (purchase). The contracts are undertaken

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one after the other for example, in a car financing facility, a customer enters
into the Ijarah contract to lease the car from the owner (financier) at an
agreed rental for a specific period. When the leasing period ends, the Bai’
contract comes into effect, to enable the customer to purchase the car from
the owner at an agreed price.

HIBAH (GIFT)

A token given voluntarily in return for loan given or benefit obtained. Hibah
usually arises in practice when Islamic banks voluntarily pay their customers
a 'gift' on savings account balances, representing a portion of the profit
made by using those savings account balances in other activities.

IJARAH

Ijarah means lease, rent or wage. Generally, Ijarah concept means selling the
benefit of use or service for a fixed price or wage. Under this concept, the
Bank makes available to the customer the use of service of assets /
equipments such as plant, office automation, motor vehicle for a fixed
period and price.

QARD (INTEREST-FREE LOAN)

A loan extended on a goodwill basis and the borrower is only required to

repay the amount borrowed. However, the borrower may, at his discretion,
pay extra (without promising it) as a token of appreciation.

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ISLAMIC DEVELOPMENT BANK

Islamic Development Bank (also known as  IsDB), is a multilateral

development financing institution located in Jeddah, Saudi Arabia. It was
founded by the first conference of Finance Ministers of the Organization of
the Islamic Conference (OIC), convened 18 December 1973. The bank
officially began its activities on 15 Shawwal 1395H (20 October 1975). 
KEY PEOPLE is Ahmad Mohamed Ali Al-Madani (president)
Over 932 employees work over there

THE IsDB IS ALSO KNOWN AS UNITED NATIONS GENERAL ASSEMBLY

OBSERVER

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ISLAMIC BANKING IN PAKISTAN

ORIGIN OF ISLAMIC BANKING IN PAKISTAN

The process of financial system in Pakistan is coincided with the globally

resurgence of Islamic banking in late seventies. Pakistan is one of the three
countries in the world that has been trying to implement Islamic banking at
national level. The process started with the presidential order to the local
council of Islamic ideology (CII) on September 29, 1977. The council were ask
to make a blue print of interest free economists who submitted their report
in February, 1980, highlighting the various ways and sufficient details for
eliminating the interest from the financial system of Pakistan. This report
was the landmark in the effort for the setup of Islamic banking in Pakistan

INITIATIVE TAKEN IN PAKISTAN

The Islamic banking movement in Pakistan was a nationwide and

comprehensive. As it was a mammoth task, the switch-over plan was
implemented in phases. The process was started by transforming the
operations of specialized financial institutions like National Investment Trust
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(NIT), Investment Corporation of Pakistan (ICP), and house Building

Corporation (HBFC), to the system conforming to the Islamic principles with
effect from July 1, 1979. Separate interest free counters started operating in
all nationalized commercial banks, and one foreign bank from January 1,
1981, to mobilize deposits on profit and loss sharing basis. As from July 1,
1985, all commercial banking operations were made ‘interest-free’. From

that date, no bank in Pakistan, including foreign banks, was allowed to

accept any interest-bearing deposits. All existing deposits in banks were
treated to be on the basis of profit and loss sharing. However, foreign
currency deposits/loans were continued to govern on interest basis. The
government meanwhile also passed Mudarabha Companies Act 1984,
enabled financial institutions or business groups to setup special Mudaraba
Companies in a country.

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ISLAMIC BANKING IN MALAYSIA

ORIGIN OF ISLAMIC BANKING IN MALAYSIA

In Malaysia, the roots of Islamic banking go back to 1963 when the

government established Tabung Hajji or Pilgrims Management and Fund
Board. The institution was established to invest the savings of the local
Muslims in interest In Malaysia; the roots of Islamic banking go back to 1963
when the government established Tabung Hajji or Pilgrims Management and
Fund Board. The institution was established to invest the savings of the local
Muslims in interest

The first call for separate Islamic bank was made in 1980, in a seminar
held in the National University of Malaysia. The participants passed a
resolution requesting the government to pass a special law to setup an
Islamic bank in the country. Responding to the request, the government set
up a National Steering Committee in 1981 to study legal, religious and
operational aspects of setting up an Islamic bank. The committee established
the blue print of a modern Islamic banking system in 1983, which later

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enabled the government to establish an Islamic bank and to issue non-

interest bearing investment certificates.

INITIATIVE TAKEN BY MALAYSIA

The establishment of bank of Islam in Malaysia berhad (BIMB) in July 1983

marked a milestone for the development of Islamic bank and financial system

in Malaysia. BIMB carries out banking business similar to other commercial

bank, but along the principles of Islamic laws (Shariah). The bank offers

deposit taking product such as current and saving deposits under the concept

of Wadiah (guaranteed custody) and investment deposit under the concept of

Mudarabha (profit sharing). The bank grant provide finance facility such as

working capital finance under Murabahah (cost plus financing), house

financing under Bai’ Bithsmsn Ajil (deferred payment sales), leasing under

Ijarah (leasing) and project financing under Musharakah (joint venture),

BIMB has grown tremendously since its inception.

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Pot Boiler Islamic Banking

As the subject is pot boiling we would like to start with flashing up the light
on Islamic banking with the depth knowledge from last 18 months Islamic
banking had became a hot topic for the people in our country. There has
been a debate on this topic by many famous personalities whether this
Islamic banking should be permissible in India has lots of dimension. There
were protest against this banking also by RSS leaders and they had done
protest just because the word Islamic was there and they have thought that
this bank would only for the Muslims but they haven’t thought of doing any
research and never want to know what actually Islamic banking is?

FIRST ISLAMIC BANK IN INDIA

But it doesn’t have the last long effect after so many controversies and
problems Islamic Banking in now going to be launch soon in India.

State government had said that Islamic bank would going to be establish in
Kochi as soon as possible but the bank didn’t opened and the date keep on
expanding and on 29 march 2011 an article by TimesWireService.Com

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Correspondent, said that those people who are in support of interest free
banking system will not have to wait for long because it is going to be
establish in Mumbai. Reports have surfaced that the Reserve Bank of India
may soon allow a foreign Islamic bank to open its branch in Mumbai.

The meeting which was held on September 12 at Kozhikode was to discuss

the steps to be taken to set up the first Islamic bank in India. The Kerala
State Industrial Development Corporation (KSIDC) would have 11 percent
stake in the proposed banking firm. It will be registered as a Non-Banking
Finance Company (NBFC) in the beginning and later on will be transformed
into 100% Shariah-compliant bank.

An initial capital of Rs 500 cr. (Rs 5 billion) was to be mobilized from leading
non-resident Indians (NRIs) and Indian business houses. The bank was to
invest all its funds in wealth generating investment avenues and will
distribute profit to its shareholders. And they had said as registration
formalities will be completed. Then they will establish the first Islamic bank
in India in mid 2010.

The first Islamic bank may be a Turkish bank because Turkish bank has asked
for the permission from reserve bank of India to open its branch so that it
could offer Shariah-compliant lending in the country.
A finance ministry official said: "So far the bank has only sought permission
to open a representative office. We are considering their application." He
further added: "After the global economic crisis, RBI has been stringent with
allowing foreign banks in the country. As a part of its liberalized policy for
foreign banks, it has now granted permission to Bank Asya."
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It is understood that the RBI has requested the Central government to look
into the case. Any positive development will take place within 45 days that is
the time that the RBI has given to the Turkish bank. Bank Asya is a new
launch in Turkey as it came into existence in 1996. Since then it has
expanded with an aim to develop interest-free banking products. In Turkey
the bank is hugely popular with some 179 branches.

Why Islamic banks in India?

After discussing the different principles of Islamic banking, this is an attempt

to explore the feasibility of Shariah banking in India. The rise of “interest” as
a blood sapping evil is alarming. To get rid of menace and save the nation
from the clutches of interest, suitable amendment should be made in
banking act. Indira Gandhi’s slogan, “GARIBI HATAO” and “ROTI KAPDA
MAKAAN” as enunciated by Zulfikar Ali Bhutto are still relevant today as it
was in the early seventies. Yet even today, horrendous disparities exist
between different segments of the Indian society. The majority of the
unorganized sector; workers; semi skilled workers, small farmers are not
able to have the bank account they are all non-bankable. Access to finance
by the poor and the vulnerable groups is prerequisites for poverty reduction
and social cohesion. Such “financial apartheid” is one of the main cause of
exclusion of the majority of the population in terms of growth. Government
must provide the disadvantage classes with the tools they need to improve
their condition. The Indian banking sector has opened up considerably in the
past decade or so and openness to the interest free banks is the logical next
step. Islamic banking is the one way to ameliorate the disadvantaged
classes. The potential benefits of allowing Islamic banking include; decreased
economic disparity between the do’s and don’ts, better integration, and
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consequently accelerate economic growth. Government of India can leap a

step toward the fulfillment of the Indira Gandhi’s much cherished dream of
“GARIBI HATAO” by reforming its sector and allowing the establishment of
Islamic banking in India

CHANGE NEEDED IN INDIAN

BANKING SYSTEM

Famous Islamic banking scholar Mufti Abdul Qader Barkatullah said that the
comprehensive changes are needed in Indian banking laws in order to
implement interest free economic system. Comprehensive change is needed
in the Indian banking laws in order to implement interest-free economic
system, said famous Islamic banking scholar Mufti Abdul Qader Barkatullah.
It is difficult to bring full-fledged Islamic banking in the present conditions in
India.
Mufti said that majority of the countries followed economic systems that
were about half a century old. But, living conditions and development ideas
have moved a lot forward. Change is needed in economic matters also as per
the change in the other fields.

India is following the laws of Britain in the banking field. Indian banks cannot
invest capital in trade and others as in Britain. At the same time, interest is
given to the investors and levied from those who take loans making rupee a

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good for trade. Money is not a good for trade in the Islamic banking idea.
Islamic banks distribute the profit from re-investing the money of the
investors in business activities and the like. And so, investors are responsible
to share chance of loss also along with profit. But, the chance of loss is not
shared with investors in the traditional banking system.

The global economic downturn has not affected the Islamic banks in Britain
much, said Mufti who is the Islamic financial adviser of several famous banks
in Britain. The relevance of the Islamic banking system increased in the UK
when a good percentage of investments turned to interest-free banking and
a considerable share of investments came from the Gulf regions. As a result,
the Islamic Bank of Britain was established in 2004. The bank has opened
seven branches within five years.

The relevance of such banks is increased by the fact that about 20 percent
account-holders are non-Muslims. Mufti added that investing in the real
estate field and others, where scope of loss is comparatively less, would be
better for those working on the field of Islamic banking in India.

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THE INSTITUTE OF ISLAMIC

BANKING AND FINANCE

The Institute of Islamic Banking and Finance incorporated with the

Government of Andhra Pradesh at Hyderabad, India under Public Societies
Registration Act 1995 is the country’s maiden effort at institutionalizing
education at all levels in the field of Islamic Economics, Banking and Finance.
The Institute is a registered non-profit, equal opportunity, professional
educational research and training institution totally independent, non
affiliated to any University nor accredited to retain complete academic
autonomy and intellectual independence regarding course content,
methodology and orientation.

The Dean has the sole discretionary authority to design and implement
course curriculum with suggestions and advice from an Academic Council
constituted and updated with experts in respective fields. The Dean is
suitably assisted in this by a team of distinguished faculty and alumni of the
Institute.

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 ISLAMIC BANKING IN INDIA

This pioneer institution apart from being India’s first and only of its kind, is
privileged to offer the Post Graduate Diploma in Islamic banking and Finance
in twelve countries around the world and has received enquiries/requests
for academic collaborations for setting up similar institutions/branches from
more than fifteen countries worldwide.

Distinguished alumni have successfully placed themselves in leading Islamic

banks/Islamic financial institutions in the Middle East and elsewhere
acknowledging the contribution of the Institute in shaping their careers.
Though the Institute does not propose any placement assurances yet the
Diploma has industry acceptability and is widely popular in conjunction with
high degree of core competence backed up by good educational
background.

The Institute by its own efforts has created a niche for itself not only in the
Islamic Finance community but also in software companies, social net
working enterprises, NGO's and other professional bodies.

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