Professional Documents
Culture Documents
By
SATHIKBASHA.A
LOGO
- Modest beginnings
- Initiated by businessmen who didnt want to deal with interest based system - Hostile environment - Challenged by conventional banking system
Good opportunity for investment Challenge to the conventional interest-based Capitalistic System Demand of Muslim population in many countries outside the Muslim world.
Success Story
300 + Islamic financial institutions
Conventional
money Bank Client
Islamic
Bank
Client
money
Differences
Islamic Banking
Functions and operations are based on shariah principles
Promote risk-sharing between provider of capital (investor) and user of funds (entrepreneurs) Aim at maximising profit but subject to Sharia'h restrictions No right of profit if there is no risk involved. The profit and loss sharing depositor may lose money in case of loss.
Conventional Banking
Functions and operations are based on fully man made principles
Investor is assured of pre-determined rate of interest
1.
2.
Financing Contracts
- Murabaha (mark-up sale)
- Musharaka (profits and loss sharing system)
Questions?
LOGO