2. INTRODUCTION
IslamicBanking is a banking
or banking activity based on
principles of Islamic (Shariah)
Shariah prohibits Riba
Investmentin business that
provide goods or services is
also known Haraam
(forbidden
6. Types of riba
Ribaal-nasi’ah : Interest on
loans.
Ribaal-fadl : Excess over and
above the loan paid in kind.
7. Reasons for prohibition
of riba
It is unjust.
It corrupts.
It implies improper appropriation
of other people’s property.
It results in negative economic
growth.
In demeans and diminishes human
personality.
10. Sharing risk
When Islamic banks invest in a business
venture, they assume risk proportional to
the ratio of their contribution.
11. Halal investment
If the forbidden items are a minor part of
the business then it is considered permissible
to invest as long as a portion of the profit is
given to charity.
13. 1. Any predetermined payment
over and above the actual
amount of principal is
prohibited : qard-el-hassan
(literally good loan)
14. 2. The lender must share in the profits or
losses arising out of the enterprise for
which the money was lent : Shari’ah
(Islamic law )
To reduce the burden of the borrower
To encourage entrepreneurs in
maximizing their efforts.
15. 3. Making money from money is not
islamically accepted :
Money advanced in business as a loan
is debt of the business and not
capital.
They are discouraged to keep money
idle.
16. 4. Gharar (uncertainty, risk or
speculation) is also prohibited :
The creditor advances the loan to win
the blessings of Allah almighty.
Bai bithaman ajil (sales with advanced
payment)
Istisna (contract to manufacture)
Ijara (hire contract)
17. 5. Investment should only support
practice or products that are not
forbidden:
Aim is to engage in only ethical
investing and moral purchasing.
25. benefits
Not centered only on credit
worthiness & ability to repay
the loans & interest.
Considerationof ethical &
moral values with its banking
operation.
26. Restrictedto useful goods
and services.
Relationship with depositors.
Eliminates
the barriers
between the one who save &
the one who invest.
27. problems
Supportspractices or
products forbidden by Islamic
Law.
Achievingconsistent Shari'ah
supervision.
Managing the pool.
28. Islamic Banking Vs
Conventional Banking
The two major difference between Islamic
Banking and Conventional Banking:
The pressure has been on RBI to
introduce Islamic banking in country
which would earn billions of dollars in
investments.
29. When Conventional banks involve in
transaction with consumer they do not
take the liability only get the benefit
from consumer in form of
interest whereas Islamic banks bear all
the liability when involve in
transaction with consumer. Getting out
any benefit without bearing its
liability is declared Haram in Islam.
31. Green finance : sustainable
environment development facing
global warming, development of
water resources.
Infrastructuredevelopment can
attract foreign investment if
country opens up to Islamic
banking.
35. D.SUBBARAO, Governor of
the Reserve Bank Of India
As interest
payment forms the
basis of current
banking principles,
and therefore ,it is
not possible to
have Islamic Bank
in India.
37. The blockades in the way to
introduction of islamic banking
system in india
The mindset of resistance to
change
Bureaucracy
The political bickering
38. RBI to look into Malaysian
Islamic banking model
39. PM held a wide ranging talks on
economic issues with Malaysian
counterpart Mohd Abdul Razak
41. Working report of RBI
The51 page report on Islamic
banking was submitted in
Mumbai in July 2006.
Theworking group was
headed by Mr. Anand
Sinha,executive director, RBI.
42. LEGAL OPINION
Example :
In Bai’Mu’ajjal, the bank resorts to
purchase and resale of properties,
which is not permissible as per the
provisions of sections 8 and 9 of
banking regulation act , 1949.
50. 1st Bank in the world.
Formed in 1975.
Recentlylaunched 'Cash
Account Manager' which
offers complete business cash
management solution for
corporate customers.
51. Atpresent DIBPL is growing
with 59 branches across
Pakistan in 26 cities.
Alternatedistribution
channels like ATM, Cash
Deposit Machines, Phone
Banking, SMS Banking,
Internet & Mobile Banking.
52. 1sttime in Pakistan DIBPL
has posted a profit of Rs. 77.8
million before tax for the
quarter ended 31st March,
2009.
54. Itis located in Karachi,
Pakistan.
Incorporated on January 27,
1997; started its operations as
investment bank in August,
1997; Granted licence as
commercial Islamic bank in
January 2002.
55. The Bank's amin financial
institutions are:
Pak
Kuwait Investment
Company.
Islamic Development Bank of
Jeddah
Shamil Bank of Bahrain.
56. Ithas a 226 branches in 63 cities
of Pakistan.
1st and largest bank awarded as Bes
Islamic Financial Institution in
Pakistan, by Global Finance magazine at
its Annual Awards for The World's Best
Islamic financial Institutions 2011.
57. It was judged on the basis on the basis of:
Contribution to the growth of Islamic
Financing in the world
- Successfully meeting customer needs.
- Creating foundation for continued fast
growth in the future.
- Growth in assets, profitability, geographic
reach, strategic relationships, new
business development & innovations in
product.
