Beruflich Dokumente
Kultur Dokumente
No more meeting of excegencies Creation of money Financing of govt. budget deficit Borrowing to repay old debts Roll overs in business finances
PLS or trading Actual assets Economic impact--- development oriented system Better risk sharing system Legal frame work Pakistans experience
Islamic system
Pakistans experience
Strong demand Huge funds New institutions Need time to develop Many questions: Are they really Islamic, can they
sustain?
Risk of default on the asset side and liability side Risk mitigation measures for both Prudential regulations and other policy guidelines No divine restrictions regarding economic performance.
Supervision by the central bank for mitigating risk as well as channeling credits into desired sectors and to fulfill economic objectives. Integration with monetary and fiscal policies.
CONVENTIONAL BANKING
ISLAMIC BANKING-- MAIN FEATURES The Islamic Financial Institutions have to keep in mind the Quranic injunction that all capital belongs to God and is to be used for the good of society
Man as His Vicergent is bound to obey His commandments in entire life including business and economics
Legitimate and halal profits Capital should be directed into halal channels Hoarding is not permissible in any form Not to create monopoly on the societys resources. Basic need to get rid of the debt ridden society Investments to contribute in the development of
national resources and serve whole community.
ISLAMIC BANKING --FI Mobilizing Funds on the basis of modaraba / Musharika and providing capital to entrepreneurs by way of different modes in accordance with shariah
Current accounts/ Trust accounts Savings accounts/ Investment accounts Term Deposits / COIIs, MCs Short term transactions b/w banks/ (in future
for IBs)
Shareholders
do
( Trade mode do do do )
Risk of default on the asset side and liability side Risk mitigation measures for both Prudential regulations and other policy guidelines Supervision by the central bank for mitigating risk as
well as channeling credits into desired sectors and to fulfill economics objectives. Integration with monetary and fiscal policies.
ISLAMIC BANKING
Liabilities& Equity
Deposits-Current,
Reserves
MC etc Capital
Reserves
Lease Financing
Investments in Shares Bonds, PTCs, etc..
Rs. in
Million
Financed Rs. in Million Through Share Capital 200 Long term loan * 450 Short term 100 loan** Lease Fin. *** 25 Current Liab. 125 850
Rs. in
Million
Financed Rs. in Million Through Share Capital 200 Murabha /DM 450 Short term 100 murabaha/mush. Ijarah 25 Current Liab. 125 850
MAIN ISSUES
Supporting Legal Framework Taxation System Education ,Training , Organized Research Govt. Support Paradigm Shift Change management issue Supervision and regulation Market practices: portfolio structure
MAIN ISSUES
PLS vs. FI Why and why not PLS Why and why not FI Practical solution Actual practice What should be the strategy
Conclusion
Pakistans financial institutions could take a large share
of muslims savings, if they took the initiative of
It has been conservatively estimated that currently about US$ 100 billion are available with muslims wanting to invest in Shariah Compliant instruments.
Conclusion
Islamic banking provides a viable alternative to
interest-based banking
Parallel banking systems for another decade or so. Can be perused without waiting for the whole economy to transform. Its own separate identity is its strength. Supply must follow Demand.