The document summarizes Malaysia's experience and achievements in Islamic banking and finance. Key points include: Malaysia has established a comprehensive parallel Islamic financial system operating alongside the conventional system, with twelve full-fledged Islamic banks and nine takaful operators. Islamic banking assets have grown rapidly in recent years and now account for around 11-16% of various sectors. The country's central bank, Bank Negara Malaysia, has played a leading role in developing the regulatory and enabling infrastructure to support the growth of the Islamic finance industry.
The document discusses the development of Islamic banking and finance in Malaysia. It notes that Malaysia has established a comprehensive Islamic financial system over the past few decades through gradual reforms. This system now includes 12 full-fledged Islamic banks, 9 takaful operators, and Islamic banking windows at conventional banks. The central bank of Malaysia, Bank Negara Malaysia, plays an active role in regulating the industry and promoting Malaysia as an international hub for Islamic finance.
ISLAMIC BANKING AND FINANCE: MALAYSIA’S EXPERIENCE AND ACHIEVEMENTSbrighteyes
ISLAMIC BANKING AND FINANCE: MALAYSIA’S EXPERIENCE AND ACHIEVEMENTS 13 June 2006
Victoria University of Wellington
Presented by:
Bakarudin Ishak
Director
Islamic Banking and Takaful Department Bank Negara Malaysia
The document discusses several key international institutions in Islamic finance:
1. The International Islamic Financial Market (IIFM) works to standardize Islamic capital and money market products and documentation.
2. The International Islamic Liquidity Management Corporation (IILM) aims to enhance cross-border investment flows and financial stability in Islamic finance. It is headquartered in Kuala Lumpur and governed by several central banks.
3. Other organizations mentioned include the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB) which issues standards and guidelines for the industry.
The document discusses the future prospects of Islamic financial institutions in Malaysia. It provides an overview of Islamic finance principles and products, the role and functions of Islamic financial institutions in Malaysia, and the opportunities and challenges they may face. Specifically, it notes that Malaysia has played a leading role in developing the global Islamic finance industry and regulating domestic Islamic banking. The future prospects for growth appear positive due to government support and liberalization measures, though institutions will need to continue innovating and competing with conventional options.
Presentation by Amirul HM & Penny Siew at the Asia-Europe Institute - University of Malaya for "Financial & Accounting Ratios for SMEs" subject, IMSME Programme. 2009.
Global trends in islamic banking - MIM Mediterranean Economic Forum 2014Jassim Mahadik
This document summarizes global trends in Islamic banking. It discusses the growth of the Islamic banking industry from $781 billion in 2008 to an estimated $1.6 trillion in assets currently. The three main types of Islamic banking systems - full-fledged, dual, and conventional plus - are described. Recent developments include mergers and acquisitions of Islamic banks as well as moves toward centralized Sharia boards and standardization. Challenges facing the industry include a lack of risk management techniques and the need for more education and research.
MALAYSIA INTERNATIONAL ISLAMIC FINANCIAL CENTRENATASHYA AYUNIE
The MIFC Executive Committee oversees the implementation of Malaysia's Islamic financial initiatives. Chaired by the Governor of Bank Negara Malaysia, the committee comprises officials from government agencies and regulators who work to promote Malaysia as a global Islamic finance center. The MIFC initiative was launched in 2006 and is supported by key Malaysian financial authorities and private sector partners to develop Islamic banking, takaful, sukuk issuance, and professional services in the country.
Short look at the requirement for developing a structure for Islamic Bank, moving away from the conventional bank requirements. Outlines the various structures available such as Islamic Banking Windows, Islamic Banking Subsidiary and Islamic Banks
The document discusses the development of Islamic banking and finance in Malaysia. It notes that Malaysia has established a comprehensive Islamic financial system over the past few decades through gradual reforms. This system now includes 12 full-fledged Islamic banks, 9 takaful operators, and Islamic banking windows at conventional banks. The central bank of Malaysia, Bank Negara Malaysia, plays an active role in regulating the industry and promoting Malaysia as an international hub for Islamic finance.
ISLAMIC BANKING AND FINANCE: MALAYSIA’S EXPERIENCE AND ACHIEVEMENTSbrighteyes
ISLAMIC BANKING AND FINANCE: MALAYSIA’S EXPERIENCE AND ACHIEVEMENTS 13 June 2006
Victoria University of Wellington
Presented by:
Bakarudin Ishak
Director
Islamic Banking and Takaful Department Bank Negara Malaysia
The document discusses several key international institutions in Islamic finance:
1. The International Islamic Financial Market (IIFM) works to standardize Islamic capital and money market products and documentation.
2. The International Islamic Liquidity Management Corporation (IILM) aims to enhance cross-border investment flows and financial stability in Islamic finance. It is headquartered in Kuala Lumpur and governed by several central banks.
3. Other organizations mentioned include the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB) which issues standards and guidelines for the industry.
The document discusses the future prospects of Islamic financial institutions in Malaysia. It provides an overview of Islamic finance principles and products, the role and functions of Islamic financial institutions in Malaysia, and the opportunities and challenges they may face. Specifically, it notes that Malaysia has played a leading role in developing the global Islamic finance industry and regulating domestic Islamic banking. The future prospects for growth appear positive due to government support and liberalization measures, though institutions will need to continue innovating and competing with conventional options.
Presentation by Amirul HM & Penny Siew at the Asia-Europe Institute - University of Malaya for "Financial & Accounting Ratios for SMEs" subject, IMSME Programme. 2009.
Global trends in islamic banking - MIM Mediterranean Economic Forum 2014Jassim Mahadik
This document summarizes global trends in Islamic banking. It discusses the growth of the Islamic banking industry from $781 billion in 2008 to an estimated $1.6 trillion in assets currently. The three main types of Islamic banking systems - full-fledged, dual, and conventional plus - are described. Recent developments include mergers and acquisitions of Islamic banks as well as moves toward centralized Sharia boards and standardization. Challenges facing the industry include a lack of risk management techniques and the need for more education and research.
MALAYSIA INTERNATIONAL ISLAMIC FINANCIAL CENTRENATASHYA AYUNIE
The MIFC Executive Committee oversees the implementation of Malaysia's Islamic financial initiatives. Chaired by the Governor of Bank Negara Malaysia, the committee comprises officials from government agencies and regulators who work to promote Malaysia as a global Islamic finance center. The MIFC initiative was launched in 2006 and is supported by key Malaysian financial authorities and private sector partners to develop Islamic banking, takaful, sukuk issuance, and professional services in the country.
Short look at the requirement for developing a structure for Islamic Bank, moving away from the conventional bank requirements. Outlines the various structures available such as Islamic Banking Windows, Islamic Banking Subsidiary and Islamic Banks
INTERNATIONAL ISLAMIC FINANCIAL MARKET (IIFM) NATASHYA AYUNIE
IIFM is an international standards-setting body for the Islamic finance industry that focuses on standardizing Islamic financial contracts and products. It works to unify the market by developing best practices at the global level and harmonizing Shari'ah interpretations. IIFM has published several standards, including master agreements for treasury placement, hedging products, and collateralized murabahah agreements, to facilitate standardized documentation for liquidity management, risk management, and access to liquidity. IIFM standards aim to support a sustainable development of the Islamic finance industry globally.
This document provides information about the Global Islamic Finance Report 2021 (GIFR 2021), including its production partners, sponsors, editorial team, and table of contents. Specifically, it notes that GIFR 2021 is a joint publication between the Cambridge Institute of Islamic Finance and Ajman University Center for Excellence in Islamic Finance. It also lists the organizations and individuals that contributed to and supported the report. The document concludes by outlining the various chapters that will be included in GIFR 2021, focusing on the role of Islamic finance in a post-COVID world.
ISLAMIC ACCOUNTING PRACTICES - THE IMPORTANCE OFISLAMIC CAPITAL MARKET IN MA...Nur Adillah Arifah Nazri
Capital markets are an important component of the financial system for raising funds for long-term investment. They provide opportunities for diversification of risk through cross-sectional risk sharing. The long-term investments are facilitated through a series of short-term contracts in the form of tradable securities enabling the investors an opportunity to exit or enter through trade. Thus they provide an element of liquidity to the otherwise illiquid assets. The secondary market also provides pricing and valuation of assets on a continued basis thus eliminating arbitrage and inefficiencies
The document provides an overview of the Islamic finance industry. It discusses the history and origins of Islamic finance, the key players and geographic clusters, major products and deals, and current trends. The global Islamic finance market is growing rapidly at 10-15% annually and has reached $265 billion in assets, though there remains a need for standardization and professional training to further develop the industry.
The banking system in Malaysia is led by commercial banks, investment banks, and Islamic banks, and they are the primary mobilizers of funds and financiers of economic activity. They are complemented by non-bank financial institutions. Bank Negara Malaysia is the central bank and regulates the financial system to promote monetary stability and economic development. Malaysia has a diverse financial system including various types of banks, insurers, and development financial institutions that support strategic sectors of the economy.
This document provides an overview of the Malaysian Islamic financial system. It discusses the key players and markets in the Malaysian financial system as well as the basic principles of Islamic finance. The history and development of Islamic banking in Malaysia is then outlined, including the establishment of the first Islamic bank in 1983 and the adoption of a dual banking system. Current statistics on Islamic banking and takaful in Malaysia are also presented.
This document provides an overview of the framework of the Islamic financial system. It begins with definitions of Islamic banking as a banking system that complies with Shariah (Islamic law). It then discusses the historical development of Islamic banking globally and locally in Malaysia in three phases from 1963-2010. Key events and milestones are highlighted. The document also outlines the framework and functions of Islamic banks, and compares features of conventional versus Islamic banks. Finally, it provides definitions and principles of Takaful (Islamic insurance) and highlights the history of the Takaful industry in Malaysia.
This document summarizes an Islamic finance presentation on emerging opportunities for Islamic ship financing. It outlines the concepts of Islamic finance, including a prohibition on interest (riba) and a focus on profit and loss sharing. It discusses the progress of Islamic banking, current market size, and recent deals in Islamic ship financing. Structures for Islamic ship financing include existing vessel financing using an ijara (lease) structure and newbuild vessel financing using an istisna'a (procurement contract) structure. Case studies of recent Islamic ship financing deals are also presented.
TITLE : REGULATION AND SUPERVISION OF ISLAMIC CAPITAL MARKETNATASHYA AYUNIE
The document discusses the regulation and supervision of Malaysia's Islamic capital market (ICM). The main regulatory bodies are the Securities Commission and Bursa Malaysia Berhad. The Securities Commission regulates both conventional and Islamic capital markets and has a dedicated Islamic Capital Market Department. It is also responsible for supervising exchanges, clearing houses, and approving corporate bond issues. Additionally, Malaysia has established a Shariah Advisory Council to ensure ICM products and services comply with Shariah requirements. The Council reviews documents, investments, and provides advice on Shariah issues.
1) Pakistan was one of the first countries to implement Islamic banking in the 1960s and 1970s, with the founder of Pakistan calling for an Islamic banking system when establishing the State Bank of Pakistan in 1948.
2) Egypt started the first modern Islamic bank, called Mit Ghamr Savings Bank, in 1963 based on profit-sharing principles without interest. It succeeded in attracting many depositors and financing local projects until being shut down for political reasons in 1967.
3) Malaysia established Tabung Haji in 1962 as the first Islamic bank in Asia to help Muslims save for the hajj pilgrimage, and it remains an important Islamic financial institution today.
This document summarizes the development of Islamic finance in the Gulf Cooperation Council (GCC) states. It finds that the GCC collectively accounts for over 40% of global shariah-compliant financial assets, led by Saudi Arabia, Kuwait, UAE, Bahrain, and Qatar. Government policy has generally facilitated Islamic finance's expansion through legislation and regulation, though some GCC states were initially cautious. The banking sector has grown rapidly, offering deposits, financing for trade, real estate, and consumer credit. Sukuk issuance and financial centers have also contributed to the industry's growth, with Bahrain emerging as a major Islamic finance hub. Overall, the GCC states have played a leading role in the global development of Islamic
ISLAMIC ACCOUNTING PRACTICES - THE IMPORTANCE OF ISLAMIC CAPITAL MARKET IN MA...Nur Adillah Arifah Nazri
Capital markets are an important component of the financial system for raising funds for long-term investment. They provide opportunities for diversification of risk through cross-sectional risk sharing. The long-term investments are facilitated through a series of short-term contracts in the form of tradable securities enabling the investors an opportunity to exit or enter through trade. Thus they provide an element of liquidity to the otherwise illiquid assets. The secondary market also provides pricing and valuation of assets on a continued basis thus eliminating arbitrage and inefficiencies
Emergence of islamic Finance in Malaysia (2017) & Career in Islamic FinanceAmir Alfatakh
The Emergence of Islamic Finance, career opportunities in Islamic Finance, and what the industry is looking for (Career briefing to International Islamic University of Malaysia IIUM in April 2017)
This presentation was presented by a group of students of MBA (Finance) at University Institute of Management Sciences (University of Arid Agriculture Rawalpindi, Pakistan
The document provides an overview of the global Islamic asset management sector. It finds that while the number of Islamic funds has significantly increased over the past five years, assets under management have grown only marginally and remain a small fraction of total Islamic finance assets. Malaysia, Saudi Arabia, and Luxembourg collectively host 71% of global Islamic funds. Sukuk funds outperformed benchmarks after the 2008 crisis but have struggled more recently. Achieving scale remains a key challenge for the industry.
Recent changes in regulations in Malaysia on definition of Investment based on Mudarabah, Musyarakah and Wakalah contracts. Following the Islamic Financial Services Act 2013 (IFSA)
This document discusses Islamic finance in Malaysia. It provides information on the growth of Islamic finance since 1963 with the establishment of institutions like Tabung Haji and Bank Islam Malaysia. It describes the functions of key institutions like Bank Negara Malaysia, the central bank that regulates the country's financial system, and the Syariah Council that endorses Islamic products. It also mentions other Islamic organizations in Malaysia that support the development and administration of Islamic affairs.
Hi,
I hope you are fine, My name is Abdul Hadi Anwar, I am Back with new Presentation on Riyadh Bank. This Presentation is prepared by me and my two more friends, but I hope you like it,
For further information or any help then please contact me:
E: abdulhadianwar9998@gmail.com
FB: https://www.facebook.com/innocent.hadi.733
Regard
Abdul Hadi Anwar Siddiqui
11.islamic banking a study of the relevant operating modes in current financi...Alexander Decker
This document summarizes the history and operating modes of Islamic banking. It discusses:
1) Islamic banking emerged in the 1960s/70s as an alternative to interest-based banking guided by Islamic principles. Currently there are over 300 Islamic banks worldwide.
2) The main operating modes of Islamic banking include profit and loss sharing (mudarabah), equity partnerships (musharakah), and fixed-return contracts like murabaha (cost-plus sale).
3) Murabaha contract allows banks to purchase goods for clients and sell them at a markup, functioning as a financing mechanism while avoiding interest. It has become widely used in practice.
Islamic banking a study of the relevant operating modes in current financial ...Alexander Decker
This document summarizes the history and operating modes of Islamic banking. It discusses:
1) Islamic banking emerged in the 1960s/70s as an alternative to interest-based banking guided by Islamic principles. Currently there are over 300 Islamic banks worldwide.
2) The main operating modes of Islamic banking include profit and loss sharing (mudarabah), equity partnerships (musharakah), and fixed-return contracts like murabaha (cost-plus sale).
3) Murabaha contract allows banks to purchase goods for clients and sell them at a markup, functioning as a financing mechanism while avoiding interest. It has become widely used in practice.
Islamic Banking Development in the UK. By Wseem Al -Taher.Waseem Al-Taher
This dissertation examines the development of Islamic banking in the UK. It analyzes the Islamic Bank of Britain as a case study to evaluate the growth of Islamic banking in the country. A survey of 159 UK university students was also conducted to assess awareness and perceptions of Islamic banking. The study finds that while awareness remains low, there is no significant negative attitude toward Islamic banking. However, the industry has not grown substantially on a retail level in the UK. The dissertation concludes there is a need for more aggressive marketing, improved customer service, and actions to improve the image and understanding of Islamic banking in the country.
This document compares and contrasts Islamic and conventional banking systems. It discusses that both systems perform similar functions like accepting deposits and providing credit, but they differ in how they operate. Islamic banks follow sharia law and do not charge interest, instead operating via profit/loss sharing partnerships or asset purchases with rent charges. Conventional banks charge fixed interest rates on loans. The document also outlines some similarities and differences between the two systems, as well as providing examples of Islamic banking types and schemes in Pakistan.
INTERNATIONAL ISLAMIC FINANCIAL MARKET (IIFM) NATASHYA AYUNIE
IIFM is an international standards-setting body for the Islamic finance industry that focuses on standardizing Islamic financial contracts and products. It works to unify the market by developing best practices at the global level and harmonizing Shari'ah interpretations. IIFM has published several standards, including master agreements for treasury placement, hedging products, and collateralized murabahah agreements, to facilitate standardized documentation for liquidity management, risk management, and access to liquidity. IIFM standards aim to support a sustainable development of the Islamic finance industry globally.
This document provides information about the Global Islamic Finance Report 2021 (GIFR 2021), including its production partners, sponsors, editorial team, and table of contents. Specifically, it notes that GIFR 2021 is a joint publication between the Cambridge Institute of Islamic Finance and Ajman University Center for Excellence in Islamic Finance. It also lists the organizations and individuals that contributed to and supported the report. The document concludes by outlining the various chapters that will be included in GIFR 2021, focusing on the role of Islamic finance in a post-COVID world.
ISLAMIC ACCOUNTING PRACTICES - THE IMPORTANCE OFISLAMIC CAPITAL MARKET IN MA...Nur Adillah Arifah Nazri
Capital markets are an important component of the financial system for raising funds for long-term investment. They provide opportunities for diversification of risk through cross-sectional risk sharing. The long-term investments are facilitated through a series of short-term contracts in the form of tradable securities enabling the investors an opportunity to exit or enter through trade. Thus they provide an element of liquidity to the otherwise illiquid assets. The secondary market also provides pricing and valuation of assets on a continued basis thus eliminating arbitrage and inefficiencies
The document provides an overview of the Islamic finance industry. It discusses the history and origins of Islamic finance, the key players and geographic clusters, major products and deals, and current trends. The global Islamic finance market is growing rapidly at 10-15% annually and has reached $265 billion in assets, though there remains a need for standardization and professional training to further develop the industry.
The banking system in Malaysia is led by commercial banks, investment banks, and Islamic banks, and they are the primary mobilizers of funds and financiers of economic activity. They are complemented by non-bank financial institutions. Bank Negara Malaysia is the central bank and regulates the financial system to promote monetary stability and economic development. Malaysia has a diverse financial system including various types of banks, insurers, and development financial institutions that support strategic sectors of the economy.
This document provides an overview of the Malaysian Islamic financial system. It discusses the key players and markets in the Malaysian financial system as well as the basic principles of Islamic finance. The history and development of Islamic banking in Malaysia is then outlined, including the establishment of the first Islamic bank in 1983 and the adoption of a dual banking system. Current statistics on Islamic banking and takaful in Malaysia are also presented.
This document provides an overview of the framework of the Islamic financial system. It begins with definitions of Islamic banking as a banking system that complies with Shariah (Islamic law). It then discusses the historical development of Islamic banking globally and locally in Malaysia in three phases from 1963-2010. Key events and milestones are highlighted. The document also outlines the framework and functions of Islamic banks, and compares features of conventional versus Islamic banks. Finally, it provides definitions and principles of Takaful (Islamic insurance) and highlights the history of the Takaful industry in Malaysia.
This document summarizes an Islamic finance presentation on emerging opportunities for Islamic ship financing. It outlines the concepts of Islamic finance, including a prohibition on interest (riba) and a focus on profit and loss sharing. It discusses the progress of Islamic banking, current market size, and recent deals in Islamic ship financing. Structures for Islamic ship financing include existing vessel financing using an ijara (lease) structure and newbuild vessel financing using an istisna'a (procurement contract) structure. Case studies of recent Islamic ship financing deals are also presented.
TITLE : REGULATION AND SUPERVISION OF ISLAMIC CAPITAL MARKETNATASHYA AYUNIE
The document discusses the regulation and supervision of Malaysia's Islamic capital market (ICM). The main regulatory bodies are the Securities Commission and Bursa Malaysia Berhad. The Securities Commission regulates both conventional and Islamic capital markets and has a dedicated Islamic Capital Market Department. It is also responsible for supervising exchanges, clearing houses, and approving corporate bond issues. Additionally, Malaysia has established a Shariah Advisory Council to ensure ICM products and services comply with Shariah requirements. The Council reviews documents, investments, and provides advice on Shariah issues.
1) Pakistan was one of the first countries to implement Islamic banking in the 1960s and 1970s, with the founder of Pakistan calling for an Islamic banking system when establishing the State Bank of Pakistan in 1948.
2) Egypt started the first modern Islamic bank, called Mit Ghamr Savings Bank, in 1963 based on profit-sharing principles without interest. It succeeded in attracting many depositors and financing local projects until being shut down for political reasons in 1967.
3) Malaysia established Tabung Haji in 1962 as the first Islamic bank in Asia to help Muslims save for the hajj pilgrimage, and it remains an important Islamic financial institution today.
This document summarizes the development of Islamic finance in the Gulf Cooperation Council (GCC) states. It finds that the GCC collectively accounts for over 40% of global shariah-compliant financial assets, led by Saudi Arabia, Kuwait, UAE, Bahrain, and Qatar. Government policy has generally facilitated Islamic finance's expansion through legislation and regulation, though some GCC states were initially cautious. The banking sector has grown rapidly, offering deposits, financing for trade, real estate, and consumer credit. Sukuk issuance and financial centers have also contributed to the industry's growth, with Bahrain emerging as a major Islamic finance hub. Overall, the GCC states have played a leading role in the global development of Islamic
ISLAMIC ACCOUNTING PRACTICES - THE IMPORTANCE OF ISLAMIC CAPITAL MARKET IN MA...Nur Adillah Arifah Nazri
Capital markets are an important component of the financial system for raising funds for long-term investment. They provide opportunities for diversification of risk through cross-sectional risk sharing. The long-term investments are facilitated through a series of short-term contracts in the form of tradable securities enabling the investors an opportunity to exit or enter through trade. Thus they provide an element of liquidity to the otherwise illiquid assets. The secondary market also provides pricing and valuation of assets on a continued basis thus eliminating arbitrage and inefficiencies
Emergence of islamic Finance in Malaysia (2017) & Career in Islamic FinanceAmir Alfatakh
The Emergence of Islamic Finance, career opportunities in Islamic Finance, and what the industry is looking for (Career briefing to International Islamic University of Malaysia IIUM in April 2017)
This presentation was presented by a group of students of MBA (Finance) at University Institute of Management Sciences (University of Arid Agriculture Rawalpindi, Pakistan
The document provides an overview of the global Islamic asset management sector. It finds that while the number of Islamic funds has significantly increased over the past five years, assets under management have grown only marginally and remain a small fraction of total Islamic finance assets. Malaysia, Saudi Arabia, and Luxembourg collectively host 71% of global Islamic funds. Sukuk funds outperformed benchmarks after the 2008 crisis but have struggled more recently. Achieving scale remains a key challenge for the industry.
Recent changes in regulations in Malaysia on definition of Investment based on Mudarabah, Musyarakah and Wakalah contracts. Following the Islamic Financial Services Act 2013 (IFSA)
This document discusses Islamic finance in Malaysia. It provides information on the growth of Islamic finance since 1963 with the establishment of institutions like Tabung Haji and Bank Islam Malaysia. It describes the functions of key institutions like Bank Negara Malaysia, the central bank that regulates the country's financial system, and the Syariah Council that endorses Islamic products. It also mentions other Islamic organizations in Malaysia that support the development and administration of Islamic affairs.
Hi,
I hope you are fine, My name is Abdul Hadi Anwar, I am Back with new Presentation on Riyadh Bank. This Presentation is prepared by me and my two more friends, but I hope you like it,
For further information or any help then please contact me:
E: abdulhadianwar9998@gmail.com
FB: https://www.facebook.com/innocent.hadi.733
Regard
Abdul Hadi Anwar Siddiqui
11.islamic banking a study of the relevant operating modes in current financi...Alexander Decker
This document summarizes the history and operating modes of Islamic banking. It discusses:
1) Islamic banking emerged in the 1960s/70s as an alternative to interest-based banking guided by Islamic principles. Currently there are over 300 Islamic banks worldwide.
2) The main operating modes of Islamic banking include profit and loss sharing (mudarabah), equity partnerships (musharakah), and fixed-return contracts like murabaha (cost-plus sale).
3) Murabaha contract allows banks to purchase goods for clients and sell them at a markup, functioning as a financing mechanism while avoiding interest. It has become widely used in practice.
Islamic banking a study of the relevant operating modes in current financial ...Alexander Decker
This document summarizes the history and operating modes of Islamic banking. It discusses:
1) Islamic banking emerged in the 1960s/70s as an alternative to interest-based banking guided by Islamic principles. Currently there are over 300 Islamic banks worldwide.
2) The main operating modes of Islamic banking include profit and loss sharing (mudarabah), equity partnerships (musharakah), and fixed-return contracts like murabaha (cost-plus sale).
3) Murabaha contract allows banks to purchase goods for clients and sell them at a markup, functioning as a financing mechanism while avoiding interest. It has become widely used in practice.
Islamic Banking Development in the UK. By Wseem Al -Taher.Waseem Al-Taher
This dissertation examines the development of Islamic banking in the UK. It analyzes the Islamic Bank of Britain as a case study to evaluate the growth of Islamic banking in the country. A survey of 159 UK university students was also conducted to assess awareness and perceptions of Islamic banking. The study finds that while awareness remains low, there is no significant negative attitude toward Islamic banking. However, the industry has not grown substantially on a retail level in the UK. The dissertation concludes there is a need for more aggressive marketing, improved customer service, and actions to improve the image and understanding of Islamic banking in the country.
This document compares and contrasts Islamic and conventional banking systems. It discusses that both systems perform similar functions like accepting deposits and providing credit, but they differ in how they operate. Islamic banks follow sharia law and do not charge interest, instead operating via profit/loss sharing partnerships or asset purchases with rent charges. Conventional banks charge fixed interest rates on loans. The document also outlines some similarities and differences between the two systems, as well as providing examples of Islamic banking types and schemes in Pakistan.
- Islamic banking is a system of banking consistent with Shariah (Islamic law) and its core principles. It prohibits interest-based transactions and transactions that involve uncertainty and speculation.
- Islamic banking has grown rapidly in Pakistan in recent years, with its market share expected to reach 12% of the total banking sector by 2012. Several major Pakistani banks now offer Islamic banking products and services.
- Islamic banks operate according to profit-and-loss sharing models like mudaraba (investment partnership) and musharaka (joint venture partnership) rather than interest-based lending. They must separate Islamic banking activities from conventional banking.
An Overview on Islamic Modes of Financing (A Case Study of Islamic Banks in A...Ahmad Frogh Zhakfar
This document is a monograph by Ahmad Frogh "Zhakfar" on Islamic modes of financing in Afghanistan as a case study. It was submitted in partial fulfillment of a Bachelor of Business Administration degree from Rana University. The monograph provides an overview of various Islamic financing modes like Murabaha, Musharakah, Mudarabah, Ijarah, Istisna and Salam. It examines their use and impact on economic growth. Through data analysis from 2012-2014, it finds that Murabaha, Alwabeaa and profits increased while other modes like Ijarah, Musharakah, Mudarabah and finance+investments decreased. It concludes that Islamic banking has
Introduction to islamic banking and conventional bankingYousuf Ibnul Hasan
Conventional Banking institutions are limited to the monetary affairs and to the monetary markets with a purpose to gain monetary benefits in rightly or wrongly.
Islamic Banks & Financial institution with Islamic norm and directive as define for the betterment of socioeconomic development as the benefit of the society, with commercial viability of the monetary affairs, ventures and transaction in gaining and disposal of basic need and resources.
How to Quantumly Grow your Ecommerce Business - Strategies and TacticsGoECart
The document discusses strategies for growing an ecommerce business, including focusing on a niche, adopting a multi-channel approach, going mobile and social, international expansion, and implementing features like a universal shopping cart and cross-selling in the cart. It also introduces the GoECart360 ecommerce platform.
El documento describe los principales navegadores web, incluyendo su historia, características y funcionalidades. Explica que los primeros navegadores fueron desarrollados a finales de los años 90 y principios de los 2000, y que actualmente los más populares son Chrome, Safari, Firefox e Internet Explorer. Además, proporciona detalles sobre el funcionamiento y características específicas de cada uno.
The sermon at Doctors Creek Baptist Church encourages people not to worry based on a Bible passage from Matthew. The passage says to seek God's kingdom and righteousness first and not worry about tomorrow since each day has its own troubles. The sermon lists five reasons not to worry, including that it keeps one from enjoying life and accomplishes nothing good. It provides three tips to stop worrying: stop worrying and start living, stop straining and turn loose, and stop panicking and start praying.
5 ways your marketing project can ruin customer dayAlek Kowalczyk
Marketers do very creative and impressive projects. But overall result can be easily ruined by not following some simple best practices in project management.
Here is our checklist for marketing managers!
Zarządzanie projektami kreatywnymi: kruczki i sztuczkiAlek Kowalczyk
The document contains 20 photos from Flickr shared under various Creative Commons licenses. The photos show natural landscapes and environments such as forests, mountains, and beaches. They were uploaded by different photographers and can be used for non-commercial purposes with attribution.
- The narrator is sitting alone in his chamber late at night, pondering books of lore to distract himself from grief over the loss of his lover Lenore.
- He hears a tapping at his chamber door and upon opening it finds nothing, but then hears the word "Lenore" whispered.
- Later, a raven flies into his chamber and perches above the door, uttering only the word "Nevermore" in response to the narrator's questions.
- The narrator, increasingly unsettled, demands that the raven tell him if he will ever be reunited with Lenore in the afterlife, to which it again responds "Nevermore," driving
Farmers discovered that fermenting grains and water produced beer. They noted that a combination of milled grains stored in a container and exposed to the environment would ferment due to microorganisms. Beer production became industrialized in the late 1700s. The basic ingredients of beer are malt from barley grains, hops from flower cones, and water. Additional ingredients like rice and grits add starches, while yeast is needed for fermentation. Pasteurization preserves beer without altering its composition. Consuming beer can diminish pain sensitivity but also decrease balance, coordination, reaction time and cause walking problems due to its effects.
Charles moves into his dorm room at Murry University. He meets his friendly floormate Gabriella. They have breakfast together where Charles is hesitant to try the food but finds it's not bad. Later, Charles bonds with Alan over poker and they become close friends, though Charles wants more. However, Alan only sees them as friends. Charles becomes confused by Alan's mixed signals and decides to distance himself by hanging out with others like Ginger and Tara.
The document discusses an event called "Dancing with Life" that aims to help people improve their body language and relationship with their body through dance. The 4-day event in the Czech Republic in September 2012 will provide training in different bodywork schools and practices to experience the body's power and potential for communication, challenge current habits, and find harmony between mind and body. Participants will get coaching to speak more powerfully through their posture and be perceived differently by others.
Today’s online customers expect free shipping — but aside from lower margins, how does this affect e-tailers? By attending a free one-hour webinar, e-tailers can learn how their companies can actually thrive while still providing exceptional customer service, competitive shipping rates and fast delivery.
GoECart has partnered with DYMO Endicia® to offer an information-packed webinar that will provide internet retailers with data, real life experiences and solutions. Attendees will not only learn what to look for in an ecommerce and order management solution, but also how to access US Postal Service features and rates, what the market trends are in small parcel shipments, and when to use the Postal Service to save time and money on shipping.
Marketing Day - French Style or German Reliability - Alex KowalczykAlek Kowalczyk
This is not a tale about cars, but about marketing managers and their projects. Is an easy thing to delight and in the same time build trust of your client? Marketers are creative people, always on the run, generating thousands of ideas and doing multiple projects. And their customers hope they will transform general goals not only into attractive marketing ideas, but also into laser-beam precise activities and results.
Details about the Islamic banking system in Pakistan and give an overview of Islamic banking in any Islamic country. It gives some help for the fresh students to learn about Islamic banking.
20161102 the mostpresingissuesfordevelopment f islamicfinance_presentation_dj...Abubaker Mayanja
The document discusses the advancement of Islamic finance in Africa. It identifies some of the most pressing issues as the lack of a central hub, diverse legal systems across countries, and governance challenges for Islamic financial institutions. It proposes strategies like strengthening multilateral cooperation through organizations like the Islamic Development Bank, encouraging private sector engagement, and developing country-to-country partnerships to help boost Islamic finance. Establishing hubs in OIC member states and aligning with the IDB strategy could help attract funding and technical support. Key trends in Africa like emerging markets and the middle class present opportunities for Islamic finance to grow.
ALHUDA CENTRE OF ISLAMIC BANKING & ECONOMICS IS PLEASED TO ORGANIZE AFRICAN 2 – DAYS SPECIALIZED TRAINING WORKSHOP ISLAMIC BANKING, ISLAMIC SME & ISLAMIC MICRO FINANCE on 13th & 14th June, 2014 - Ghana
Understandingof islamicbankbalancesheetHaraf Ahmed
This document provides an overview of Islamic banking in Malaysia, including Bank Islam. It discusses key financial ratios and market share data for Bank Islam. The presentation covers Malaysia's perspective on Islamic bank financial statements and accounting equations. It also outlines governance structures for Islamic banks, definitions of banking in Malaysia, principles of Islamic finance, and key aspects of Islamic financial transactions.
The document summarizes Islamic finance, its relevance and growth. It discusses how Islamic finance prohibits interest and certain investments based on religious principles. It has grown significantly in recent decades to become a mainstream part of the global financial system, with an estimated market size of $750 billion. The future of Islamic finance looks promising as the industry develops new products and reaches new markets and populations around the world.
The document provides an introduction to Islamic microfinance. It discusses the differences between Islamic and conventional microfinance, highlighting that Islamic microfinance is based on risk-sharing partnerships rather than interest-bearing loans. Various Islamic microfinance products are described, including modes based on trade, partnership, and rental. The progress and growth of Islamic banking internationally and in Pakistan is also summarized.
The document provides an introduction to Islamic microfinance. It discusses the differences between Islamic and conventional microfinance, highlighting that Islamic microfinance is based on risk-sharing partnerships rather than interest-based lending. Various Islamic microfinance product structures are described, including modes based on trade, partnership and rental. The progress and growth of Islamic banking globally and in Pakistan is also summarized.
This document discusses the history and development of Islamic accounting and auditing standards in Malaysia. It provides details on:
- The establishment of the first Islamic banks and universities in Malaysia in the 1980s to support Islamic finance.
- Key organizations established by the Malaysian government to regulate and develop Islamic economic initiatives and institutions.
- The issuance of guidelines by Bank Negara Malaysia on financial reporting for Islamic financial institutions, which introduced additional reporting requirements compared to conventional standards.
- The role of the Malaysian Accounting Standards Board in developing the first Islamic financial reporting standard and other exposure drafts to provide accounting guidance for core Islamic finance concepts.
- Challenges in standardization due to differences of opinion among
Islamic banking refers to banking that complies with Sharia (Islamic law) and its key principles, avoiding Riba (usury), Gharar (uncertainty), and ensuring transactions are Halal (permissible). It involves various compliant products like Murabaha, Musharakah, Sukuk, and Ijarah. There are various global winners for best Islamic financial institutions and services. Islamic banking in Pakistan includes banks like Dubai Islamic Bank Pakistan and Meezan Bank. However, differing opinions between Sharia boards can cause confusion over product approvals. Some experts argue that Islamic finance can help alleviate poverty and promote growth.
This document summarizes a 5-day training conference on Islamic banking hosted by AlHuda Centre of Islamic Banking and Economics. The conference aimed to educate participants on the principles and practices of Islamic banking, including Shariah-compliant financing modes like murabaha, salam, istisna, ijarah, and diminishing musharaka. It also covered topics such as Islamic insurance (takaful), Islamic bonds (sukuk), Islamic microfinance, and Islamic funds. The schedule outlines the daily sessions and topics to be discussed in depth over the course of the conference.
This document discusses risk management in Islamic banking and finance. It provides an overview of Islamic banking principles and history. It then examines the specific risks faced by Islamic banks, such as liquidity risk and credit risk. It also explores the development of Islamic financial contracts and instruments. The document then focuses on the Arab Finance House in Lebanon as a case study. It analyzes the bank's development, strategies, investments and financial highlights. It concludes by discussing the future prospects for the Arab Finance House, including plans for continued growth while adhering to Sharia principles.
This document discusses Islamic microfinance in Pakistan. It provides background on the country's population, economy, poverty levels, and the developing microfinance industry. It then summarizes that there are over 14 Islamic microfinance institutions operating in Pakistan with over 350 branches serving over 400,000 clients. The major Islamic microfinance products are murabahah and qard-e-hasan loans. It also notes challenges like a lack of shariah-compliant funding and opportunities for future growth.
AlHuda CIBE in association with AL BARAKAH Multi-purpose Cooperative Society Limited & Cararia Solutions LTD is going to organize a ‘‘Two Days Specialized Training Workshop on Islamic Banking and Finance’’ on 19 – 20 April, 2017 at Mauritius. For further information please visit: http://www.alhudacibe.com/roadshow2017/mauritius.php and email: info@alhudacibe.comShow less
The document provides information about an upcoming conference on Islamic banking and finance in the Commonwealth of Independent States (CIS) countries. The conference will explore the untapped potential of Islamic banking in the CIS region, and provide insights into global trends and innovations in Islamic banking, takaful, sukuk, and financial inclusion. It will take place on May 2-4, 2019 in Tashkent, Uzbekistan and include sessions on regulatory frameworks, investment opportunities, and a post-event workshop on Islamic banking, takaful and microfinance.
AlHuda Center of Islamic Banking and Economics is organizing a two-day specialized training workshop on Islamic banking and finance in Mauritius on August 02-03, 2017 to provide education on topics like Islamic economics, Islamic banking products and contracts, risk management, and more, with speakers including Muhammad Zubair Mughal and Qazi Abdul Samad.
This document discusses Islamic microfinance principles and products. It provides an overview of the basic principles of Islamic banking such as a prohibition on interest and risk sharing. It then discusses the current state of the global Islamic finance industry, noting there are over 2000 institutions in 81 countries managing over $2.3 trillion in assets. The document also summarizes key innovations and challenges within the Islamic microfinance sectors of several countries, such as Pakistan, Afghanistan, Indonesia and Yemen.
AlHuda Centre of Islamic Banking and Economics (CIBE) provides advisory, consultancy, education, training, research and product development services related to Islamic banking and finance. It has organized many international training workshops to build the capacity of Islamic finance professionals. Given Pakistan's potential for growth in Islamic banking and finance, AlHuda CIBE plans to hold a training workshop there on Islamic banking to further develop professionals in the field. The document also notes that while Islamic finance has grown, there remains a lack of skilled human capital, which requires immediate attention.
The document provides an overview of Islamic banking, including its principles, key differences from conventional banking, common products and financing modes, and the progress and global landscape of the Islamic banking industry. It discusses how Islamic banking is based on Shariah principles of prohibiting riba (interest) and encouraging profit and loss sharing. It also summarizes some major Islamic banking products and the industry's growth in Pakistan and other countries around the world.
The document provides an overview of Islamic banking, including its foundations in Islamic principles, key differences from conventional banking, common Islamic banking products and financing modes, and the progress and current state of the Islamic banking industry both in Pakistan and globally. It discusses Islamic prohibitions on riba (interest), and how Islamic banks engage in trade-based, partnership-based and rental-based modes to fulfill financial needs in accordance with Shariah law.
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1. ISLAMIC BANKING AND FINANCE: MALAYSIA’S EXPERIENCE AND ACHIEVEMENTS 13 June 2006 Victoria University of Wellington Presented by: Bakarudin Ishak Director Islamic Banking and Takaful Department Bank Negara Malaysia ISLAMIC BANKING & FINANCE IN MALAYSIA
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5. STAGES OF DEVELOPMENT Gradual and pragmatic .. achieved significant milestones in building comprehensive and integrated Islamic financial system with diversity of players …. Milestones 1969 1983 1993 2003 Pilgrimage Fund Boar d Bank Islam Malaysia Bhd. Bank Muamalat Malaysia Bhd. Foreign Islamic banks Full-fledged Islamic banks Conventional banks offer Islamic window Takaful Operators Syarikat Takaful Malaysia Bhd. Takaful Nasional, Mayban Takaful, Takaful Iklhas, Commerce Takaful Islamic subsidiary Islamic money markets
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7. Institutional & Regulatory development Product and market development Legal and Shariah framework Enhancement of knowledge and expertise DEVELOPMENTAL FOCUS
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12. LEADING INITIATIVES IN ISLAMIC FINANCE … for global integration 2005 Islamic Financial Services Board Malaysia global sukuk 2002 2003 2004 Islamic securities/ Sukuks by multilateral dev’t banks Malaysia-IDB MoU Shariah scholars dialogue Financial liberalisation Financial Market Islamic Index Foreign Islamic FIs, 49% foreign equity in Islamic banks and takaful companies Forex liberalisation Promotion of trade, investment, takaful, financial market & ICT International Islamic standard-setting body Attract international investors First global sovereign sukuk Greater Shariah harmonisation Financial Sector Master Plan Malaysia as international hub/ Labuan’s niche in Islamic finance
13. Meeting the education needs of all levels of Islamic finance practitioners Level of knowledge: Elementary Focus: Short training courses to meet industry’s needs IBFIM INCEIF ICLIF Level of knowledge: Intermediate & advanced Focus: International professional certification and post-graduate programs Focus: Leadership programs Institutions of higher learning Other training providers Human Capital Development in Islamic Finance
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15. “… Islamic banking and finance will emerge as a force to be reckoned with in shaping the future development of global finance …”
22. DEPOSITORS/ INVESTORS BANK PROFIT FINANCING AND INVESTMENT ACTIVITIES LOSS 30% 70% 100% INVESTMENT ACCOUNTS INVEST FUNDS (MUDHARABAH) Pre-agreed Profit- Sharing Ratio ISLAMIC BANKING & FINANCE IN MALAYSIA
23. Ijarah Istisna Bai’ al salam Musyarakah Mudharabah Bai’ bithaman ajil Murabahah EXAMPLES OF ISLAMIC CONTRACTS Lease Commission to manufacture (progressive payment) (price is paid in advance, goods delivered in the future) Islamic forward sale Partnership financing Profit Sharing contract D eferred payment sale Cost –plus or mark-up
24. Sources of funds Non-mudharabah deposits Mudharabah deposits SHF Application of funds General pool Specific account I Specific account II Profit Distribution of profit Depositors Bank Depositors or ISLAMIC BANKING & FINANCE IN MALAYSIA ISLAMIC BANKING OPERATIONS
25. Owners’ Equity Investment risk reserve Profit equalization reserve Profit sharing investment accounts Equity of Profit Sharing Investment Accounts (PSIA) Other liabilities Current accounts LIABILITIES STYLIZED BALANCE SHEET OF AN IIFS Fixed assets Other assets Inventories Equity investment in capital ventures Equity investment in joint ventures Investment in real estate Investment in leased assets Investment in securities Sales receivables Cash & cash equivalents ASSETS
26. TAKAFUL (e.g. Family, General) TABARRU’ (Donation) PROFIT SHARING ON SURPLUS A contract among participants to reciprocally help each other against defined loss Commercial profit sharing contract between participants and takaful operator Agreement to relinquish certain portion of contribution as donation to fulfil obligation of mutual help and joint guarantee Concepts Based on……. Takaful
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Editor's Notes
Population distribution by race: Malay – 50.4% Chinese – 23.7% Indigenous – 11.0% Indian – 7.1% Others – 7.8% GDP 1Q 2006: RM66.2 b End 2005: RM262 b
Islamic financial institutions has been in existence since the establishment of the Pilgimage fund board in 1969. The Islamic financial system in Malaysia has evolved as a viable and competitive component of the overall financial system. The strategy adopted by Malaysia has been to develop a comprehensive Islamic financial system that operates in parallel with the conventional system. Emphasis was given to the development of a comprehensive financial infrastructure that includes the Islamic banking industry, Takaful operators and Islamic financial markets (Islamic money and capital market). The intra-dependecy of these key structural components creates a comprehensive enabling environment for the financial system to effectively plays its role as an efficient conduit to mobilise resources and provide financing to economic sector. Malaysia started the establishment of one Islamic bank (Bank Islamic Malaysia Berhad, 1983) to spearhead the introduction of Islamic banking products and services and followed by the establishment of Takaful operator (Syarikat Takaful Malaysia Berhad), 1984. To provide atrong support to Islamic banking system and Takaful industry, the Islamic money market was established in 1994. Today, Islamic financial system in Malaysia has emerged as important components that contributes to the growth and development of Malaysian economy with the creation diversity of players encompasses the domestic as well as the foreign banking players. The Islamic banking system is currently represented by 29 Islamic banking institutions, comprising of 2 Islamic banks, 2 Islamic subsidiaries and 25 Islamic banking scheme banks offering comprehensive and wide range of Islamic financial products and services. The takaful industry is currently represented by 4 Takaful operators. Greater details will be elaborated in this presentation.
In Malaysia separate banking legislation was enacted for Islamic banking institutions to exist side-by-side with the conventional banks. The government played significant role in the enactment of various legislation that enable the establishment of Islamic bank & Takaful operator. The Islamic banking Act (IBA) 1983 enacted by the parliament facilitated the establishment of Bank Islam Malaysia Berhad (BIMB). The IBA allows these institutions to carry out their business along Shariah principles. The IBA also allows BNM with powers to supervise and regulate Islamic banks . In addition, t he Government Investment Act 1983 was also enacted at the same time to empower the Government of Malaysia to issue Government Investment Is sues (GII), which is the government securities issued based on Syariah principles . As the GII is regarded as liquid assets, the Islamic banks could invest in the GII to meet the prescribed liquidity requirements as well as to invest s t their surplus funds. In 1984, the Takaful Act (TA) was enacted that paved the establishment of Syarikat Takaful Malaysia . This act govern the conduct of Takaful business. The establishment of Takaful was inspired by the demand for Shariah compliant alternative to conventional insurance, as well as to complement the operation of the Islamic bank. In terms of Shariah infrastructure, the IBA and the TA requires the Islamic Bank Takaful operator to establish Shariah advisory council to ensure their operation satisfy with Shariah requirements. On the prudential regulation, in the interim (pending IFSB standard) BIMB and TA has to observed similar regulatory requirements adopted by the conventional institutions. For instance, BIMB has to observe a minimum risk weighted capital ratio, liquidity requirement and statutory reserve requirement. BIMB has proved that Islmic banking is viable and demonstrated capability to operate in parallel with the conventional banks, where in 1992 it was listed in the KLSE
Islamic Financial Services Board has 84 members, incl. 7 multilateral institutions Dow Jones RHB Islamic Malaysia Index lists 74 Shariah compliant counters (< 10% of total listed securities) Total market capitalisation is RM192 billion (~28% of total) as of end-2005 A Malaysian sits on the Dow Jones Shariah Supervisory Board (Dr. Daud) RHB Group will launch the first index fund due in June 2006, namely, the Dow Jones RHB Islamic Malaysia Index Fund Following the liberalisation of the foreign exchange administrative rules in April 2004, the World Bank and International Finance Corporation issued sukuks in ringgit denominated currency (Wawasan Bond of RM760 million and RM500 million respectively)
Source General Council for Islamic Banks And Financial Institutions (CIBAFI), World Wealth Report & Dow Jones Islamic banking assets (IBs & windows) - >USD400 billion Islamic mutual funds - > USD300 billion Islamic sovereign & corporate sukuk – USD15 billion Global market capitalisation of Dow Jones Islamic Index - >USD10 trillion Middle East high net worth individuals – USD1.5 trillion & expected to reach USD2 trillion
In Malaysia’s dual financial system:- i. Islamic banks operate side-by-side conventional banks ii. conventional banks offering Islamic banking services iii. several conventional banks with windows also have Islamic branches iv. To date, 3 conventional banks (RHB, BCB & HL) have set up Islamic banking subsidiaries within the banking groups. 3 more will be operational soon v. Insurance companies operate side-by-side takaful operators Background information on development in the region Indonesia, Brunei and Thailand have introduced Islamic banking Indonesia has set up its first Islamic bank in 1992 and now has two Islamic commercial banks (Bank Muamalat and the converted Mandiri Bank) and a few rural banks operating on Shariah principles Brunei established in 1993 its first Islamic Bank, Islamic Bank of Brunei, followed by the converted Islamic Development Bank of Brunei in 2000 State-owned Krung Thai Bank has launch ed Islamic banking services for the first time in the country , making it be the first commercial bank in the country to launch the services (c urrently, only the Government Savings Bank provides Islamic banking services in Thailand ) The Thai Bank for Agriculture and Agricultural Cooperative ha s opened 30 branch offices in 14 provinces for its special banking service based on the Islamic principle Labuan IOFC has five Islamic offshore banks and investment offshore banks (including Bank Islam, Bank Muamalat, Al Hidayah and Rusd)
In Malaysia’s dual financial system:- i. Islamic banks operate side-by-side conventional banks ii. conventional banks offering Islamic banking services iii. several conventional banks with windows also have Islamic branches iv. To date, 3 conventional banks (RHB, BCB & HL) have set up Islamic banking subsidiaries within the banking groups. 3 more will be operational soon v. Insurance companies operate side-by-side takaful operators Background information on development in the region Indonesia, Brunei and Thailand have introduced Islamic banking Indonesia has set up its first Islamic bank in 1992 and now has two Islamic commercial banks (Bank Muamalat and the converted Mandiri Bank) and a few rural banks operating on Shariah principles Brunei established in 1993 its first Islamic Bank, Islamic Bank of Brunei, followed by the converted Islamic Development Bank of Brunei in 2000 State-owned Krung Thai Bank has launch ed Islamic banking services for the first time in the country , making it be the first commercial bank in the country to launch the services (c urrently, only the Government Savings Bank provides Islamic banking services in Thailand ) The Thai Bank for Agriculture and Agricultural Cooperative ha s opened 30 branch offices in 14 provinces for its special banking service based on the Islamic principle Labuan IOFC has five Islamic offshore banks and investment offshore banks (including Bank Islam, Bank Muamalat, Al Hidayah and Rusd)
Total Islamic banking assets increased to RM113.5 billion , which accounted for 11.6% of the total assets in the banking system. The Islamic deposits and financing increased to RM85.0 billion and RM67.5 billion to constitute 11.6% and 15.7% respectively of the total amounts in the banking system. The takaful sector sustained a steady growth momentum, assets increased to RM6.2 billion , capturing 5.9 % of the total assets of the insurance sector. Market penetration of the takaful sector increased from 5.1% in 2004 to 5.9% as at March 2005. The Islamic money market registered a monthly turnover of RM21 billion in terms of trading and investment activities. Islamic private debt securities (PDS) accounted for 40% of the total outstanding PDS . A significant development in the mortgage securities segment was the issuance of the first Islamic residential mortgage backed securities based on musyarakah concept by Cagamas MBS Berhad , a special purpose company established by the Cagamas Berhad. The total issuance of this securities amounted to RM2.05 billion , of which the underlying assets are represented by the government’s Islamic house financing.
Three underlying Islamic principles in takaful i.e.: AL-TAKAFUL - the pact among a group of participants, reciprocally guaranteeing each other against loss or damage that may befall anyone of them AL-MUDHARABAH - is a commercial profit sharing contract between the provider of fund i.e. the participants and the entrepreneur who conducts the business i.e. the takaful company. If profits made, it is shared between the participants and the company after the obligation of assisting fellow participants has been fulfilled AL-TABARRU’ - an agreement by a participant to relinquish as donation a certain proportion of the takaful contribution that he agrees to pay, thus enabling him to fulfil obligation of mutual help should anyone of his fellow participants suffers a defined loss al-tabarru’ eliminates the element of uncertainty in a takaful contract whereby, in the event of a loss, the fellow participant who received the compensation knows the source of the loss coverage is definitely from the al-tabarru’ fund the operation of takaful is confined within the &quot; tijari &quot; sector or popularly known as the commercial sector the transactional aspect of the commercial activity of takaful must be subject to the Islamic contractual laws to ensure its compliance with the Syariah