Islamic banking is expanding from the Gulf to India. It prohibits interest and investing in businesses like alcohol or pornography. Products include profit-sharing models like mudarabah and murabahah. Regulatory issues include existing Indian banking laws not fully accommodating practices like ijarah leases. Overall, Islamic banking has potential in India given its diversity, though interest-free options already exist within the current banking system.
Islamic finance (Revolution in the Making) 2014Adel Abouhana
Revolution in the making in Global Finance...
everyone's products... It is a Reality...
Bai ( Sale & Purchase )
Ijarah ( Islamic Leasing )
Basic Mode of Financing ( Musharkah & Modarabah)
Takaful ( Islamic Insurance )
Sukuk ( Islamic Bonds )
Qard
Zakat & Ushar
THE PROSPECT OF ISLAMIC FINANCE IN THE PHILIPPINESNcmf Halal
February 9, 2015, Lecture on The Prospect of Islamic Finance in the Philippines by NCMF Commissioner MEHOL K. SADAIN held at NCMF Social Hall, Central Office.
Islamic finance (Revolution in the Making) 2014Adel Abouhana
Revolution in the making in Global Finance...
everyone's products... It is a Reality...
Bai ( Sale & Purchase )
Ijarah ( Islamic Leasing )
Basic Mode of Financing ( Musharkah & Modarabah)
Takaful ( Islamic Insurance )
Sukuk ( Islamic Bonds )
Qard
Zakat & Ushar
THE PROSPECT OF ISLAMIC FINANCE IN THE PHILIPPINESNcmf Halal
February 9, 2015, Lecture on The Prospect of Islamic Finance in the Philippines by NCMF Commissioner MEHOL K. SADAIN held at NCMF Social Hall, Central Office.
Regulating Islamic Banking : A Malaysian PerspectiveLokesh Gupta
This paper provides an insight of importance of regulations and supervisory structures for Islamic Banking System. This builds up public confidence and ensure well-being of the Economy. It also covers the various initiatives taken by the Central Bank of Malaysia for Islamic Banks to counter future risks and to maintain financial stability in the financial sector.
Islamic Capital Market is a long term market transactions are carried out in ways that does not conflict with the conscience of Muslims and Islam religion. It follows the religious law or Shariah compliance that is free from any activities prohibited by Islam such as usury (riba), coercion, ambiguity (gharar), and gambing (maysir). The Shariah Advisory Council (SAC) was established in May 1996 as advisor of the Comission on Shariah matters especially in Islamic Capital Market.
The Malaysia Islamic Capital Market has experienced phenomenal growth and raised the bar globally for product innovation and financial intermediation. Islamic financial system is running with conventional system has seen a continuous development in the Gulf cooperation council (GCC) countries. While it has also get success to attract financial centers of world big countries such as UK, USA, France, China, Italy, Korea, Singapore and Japan. Furthermore, this market comprises the Islamic equity sector and fixed income. Various Islamic Capital Market products are available especially for Muslims who only seek into invest and transact in it such as Islamic Unit Trust, Sukuk, Shariah Indices and warrants.
This was the presentation made at Government Brennen College, Thalassery, Kerala, India; in the Seminar organized by the Islamic History Department on 27th October, 2014.
The search for alternatives to conventional
banking in the aftermath of the global financial
crisis trained the spotlights on Islamic banking
in many parts of the world.
- ThoughPaper by Infosys
Regulating Islamic Banking : A Malaysian PerspectiveLokesh Gupta
This paper provides an insight of importance of regulations and supervisory structures for Islamic Banking System. This builds up public confidence and ensure well-being of the Economy. It also covers the various initiatives taken by the Central Bank of Malaysia for Islamic Banks to counter future risks and to maintain financial stability in the financial sector.
Islamic Capital Market is a long term market transactions are carried out in ways that does not conflict with the conscience of Muslims and Islam religion. It follows the religious law or Shariah compliance that is free from any activities prohibited by Islam such as usury (riba), coercion, ambiguity (gharar), and gambing (maysir). The Shariah Advisory Council (SAC) was established in May 1996 as advisor of the Comission on Shariah matters especially in Islamic Capital Market.
The Malaysia Islamic Capital Market has experienced phenomenal growth and raised the bar globally for product innovation and financial intermediation. Islamic financial system is running with conventional system has seen a continuous development in the Gulf cooperation council (GCC) countries. While it has also get success to attract financial centers of world big countries such as UK, USA, France, China, Italy, Korea, Singapore and Japan. Furthermore, this market comprises the Islamic equity sector and fixed income. Various Islamic Capital Market products are available especially for Muslims who only seek into invest and transact in it such as Islamic Unit Trust, Sukuk, Shariah Indices and warrants.
This was the presentation made at Government Brennen College, Thalassery, Kerala, India; in the Seminar organized by the Islamic History Department on 27th October, 2014.
The search for alternatives to conventional
banking in the aftermath of the global financial
crisis trained the spotlights on Islamic banking
in many parts of the world.
- ThoughPaper by Infosys
Islamic Banking: Awareness and Feasibility in IndiaShreyas Kamath
Submission for Avishkar 2015-16, an inter-university research convention.
Category - Commerce, Law and Management
Level - Undergraduate
Won First position at the district level and competed at the University Level.
Link to Abstract: http://www.slideshare.net/shreyaskamath5/abstract-islamic-banking-feasibility-and-awareness-in-india
Objectives:
o developing a better understanding of Islamic Banking
o analysing its feasibility in India
o gauging the awareness of people regarding Islamic Banks
o drawing attention to the sections of The Banking Regulation Act – 1949 that do not support Islamic Banking.
Made for presenting at the Students' Seminar organized by the Finance and Accountancy Association (2015-16) of Ramniranjan Jhunjhunwala College, representing Jai Hind College, Churchgate.
Won 3rd position, and got a Special Mention.
[PS, flow may seem abrupt as there are hyperlinks used throughout the presentation, which is not supported on slideshare.]
Islamic Banking refers to a system of banking that complies with Islamic law also known as Shariah law which prohibits interest based banking and permits only profit sharing based banking.
Islamic Finance: An Effective & Reasonable Optioniosrjce
In Islamic finance - financial institutions, products and services designed to comply with the central
tenets of Sharia (Islamic law) – is one of the most rapidly growing segments in global financial services. Islamic
finance starts from one basic concept that is to avoid trading directly present for future money. Finance is
provided in the form of money in return for either equity or rights to share proportionately in future business
profits. It is also provided in the form of goods and services delivered in return for commitment to repay their
value at a future date. This is an obvious option in addition to the conventional practices of interest-based
finance through which people borrow money and pay it back in the future in addition to interest. This paper
addresses itself to four questions: (1) Why all the fuss about the rate of interest? (2) Is Islamic finance, as an
alternative to interest based debt finance viable and effective? (3) What Islamic finance implies for the whole
economy? (4) Given that Islamic finance is really viable, why it has not been adopted at a larger scale?
1. Islamic Banking
Expands From
Gulf To India
PRESENTED BY:
SWATI RANKA(41)
NIDHI SHAHI(53)
RAHUL PATEL(37)
KOMAL SHAH(49)
DEEPA YADAV(60)
2. Introduction of Islamic Banking
System of banking or banking activity that is consistent with the principles
of Islamic Laws (Sharia) which is against the collection or
payment of interest commonly called ‘Riba’.
As a genre of financial services, Islamic banking denounces the very idea
of interest rates, and rests on profit-sharing principles
.
Prohibits investing in business of making money out of money, upholding
the belief that wealth is generated through actual trade and investment.that
are considered unlawful or ‘Haraam’.
3. Continue…..
The book ‘Future of Money’ by Bernard Lietar, he expertly
highlights the intrinsic dangers of ‘interest’.
He illustrates how interest is a direct cause of inflation, wealth
imbalance contributing to the rich getting richer and the poor
getting poorer.
Islamic Banking has a huge market potential in India.
4. History of Islamic banking
Traced backed 8th Century(Muslim countries)
Modern Islamic Banking 1963(Egypt) by Ahmad EL Najjar.
Islamic Development Bank 1975.
Dubai Islamic Bank 1975.
5. Continue……
With presence in over 60 countries and a 15% CAGR, it has estimated
designated assets worth $1.3 trillion in more than 400 financial institutions
offering Sharia compliant products
Al Rajhi($28 billion)
6.
7. Truths of Islamic Banking
• Charging of interest is prohibited in all monetary
transactions.
• Supervised by a board of Islamic scholars and clerics
• Sharia banks do charge interest – they just give it another
name.
8.
9. Reasons to come to India
Vibrant democracy, good socio economic
principles, good business climate
Inclusive growth
Financial inclusion of Muslims
Corporate sector
Counter terrorism
Entrepreneurship
Investment framework
Bankruptcy
Stock market
13. Against
the banking approach
two sets of rules: one is based on the ideal
objectives of Shari’ah which is applicable in
normal conditions
other is based on some relaxations given in
abnormal situations
mostly relying on the second set of rules
misunderstanding among majority community has
to be addressed; Islamic banking is not just for
Muslims.
14. OVERVIEW (issues to be
addressed)
The Shariat prohibits the collection and payment
of interest.
Banks don’t pay interests on deposits; nor do they
charge interest on loans.
used to finance projects on ownership basis.
only current accounts comply
For instance, in case of a housing loan
15. An Islamic bank, however, cannot invest the
money just anywhere:
the Shariat prohibits investment in businesses
considered haraam, such as those related to
alcohol, pork or pornography.
17. Issues with adopting Islamic
Banking – From a regulatory
perspective
Except a basic offering like current account,
Al Wadiah (for saving bank account): Section 21
of the Banking Regulation Act.
Mudarabah(for term deposit or investment): Here
again, Section 21 of the BR Act
Mudarabah, Musharakah (for project finance and
SME credit): Sections 5, 6 of the BR Act
Ijarah (for home finance): Section 9 of the BR Act
18. Istisna (leasing, buyback): Besides the usual curbs
on acquiring immovable property, offering
19. Issues with adopting Islamic
Banking – Constitutional position
two aspects to evaluate:
a) The role of state, if any, in a venture like this
b) The role of such financial institutes and its
possible impact on demography
Scenario (a)
Scenario(b)
20.
21. Products trends
Musharakah (joint venture):Musharakah is a relationship between two
parties or more that contribute capital to a business and divide the net
profit and loss pro rata.
Mudarabah (profit sharing): The investor provides capital to the
entrepreneur to undertake a business or investment activity. Profits are
shared on a pre-agreed ratio, while losses are borne by the investor
alone.
Murabahah(cost-plus financing) : where the bank buys the item and
sells it to the customer. The sale price includes a profit margin agreed
upon by both parties and is repaid on a deferred basis.
22. Sukuk: Sukuk is an Islamic bond that represents proportionate
beneficial ownership in the underlying asset. The issuer provides
collateral security over the assets to sukuk holders to secure
payment of the sukuk.
Sukuk do not pay interest; rather they generate a return through
actual economic transactions in the form of sharing or leasing the
underlying assets.
Success with sukuk: According to a Standard & Poor’s report,
assets of the top 500 Islamic banks expanded 28.6% to a total $822
billion at the end of 2009, compared with $639 billion at the end of
2008. ―Only recently, the Indonesian government sold more than
$850 million worth of sukuk bonds to domestic retail investors,‖
says Samir Nair, partner (business advisory services), at Ernst &
Young.
23. Takaful(islamic insurance):which offers joint risk-sharing in
the event of a loss by one of the participants.
Sareshwala’s list is a unit-linked insurance product,
developed by insurance company Tata-AIG.
Ijara(lease): 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
24. bai al dayn securities: It refers to the sale of a debt arising from
trade and services transaction in the form of a deferred payment
sale. The customer sells this debt to the Bank at a discount.
In Malaysia, for example, Bai Al Dayn is the basis for the sale
and purchase of Islamic securities, debt certificates, and various
products.
In the Middle East, the majority of scholars consider the trading
of debt to be similar to the trading of money and therefore
ribawi or riba or (interest)-bearing.
25. conclusion
Islamic banking has a good prospects in india, given the diverse
indian canvas and holds good for india from a development
point of view.
When America,UK, Germany, France etc. are accepting Islamic
Banking why we shlould not enjoy this alternative banking.
Even World Bank accepted ethics of Islamic Banking earlier.
Now it is the right time for india.
On the other hand, there are provisions for interest-free banking
even now. Banks can invest in zero-coupon bonds, short-term
treasury bills and corporate bills — all of which are based on
implied interest rates, but don’t actually pay interest
26. Any bank can offer you a portfolio account where your
money is invested in non-interest-bearing securities.
Individuals can open non-interest bearing current accounts.
All of them in a sense comply with doctrine of Islamic
Banking.
Those who support the plea for an alternate financing
channel to support the Muslim community need to realize
that India’s banking is ―inclusive‖ and the reluctance of
some Muslims to use banks is a case of self-exclusion, not
discrimination.
