RELEVANCE OF ISLAMIC BANKING.

Presented by:-
Abhinav singh
Nadeem haidar
Mukesh pandey
 INTRODUCTION

 "Islamic bank is an institution that mobilises financial

resources and invests them in an attempt to achieve
predetermined Islamically acceptable social and financial
objectives. Both mobilisation and investment of funds should
be conducted in accordance with the principles of Islamic
Sharia". 
 The first private interest-free bank, the Dubai Islamic Bank,
was also set up in 1975 by a group of Muslim businessmen
from several countries. Two more private banks were founded
in 1977 under the name of Faisal Islamic Bank in Egypt and
the Sudan. In the same year the Kuwaiti government set up the
Kuwait Finance House.
Conventional Banks Islamic Banks

1. The functions and operating modes of 1. The functions and operating modes of
conventional banks are based on fully Islamic banks are based on the principles of
manmade principles. Islamic Shariah.

2. The investor is assured of a 2. In contrast, it promotes risk sharing

predetermined rate of interest. between provider of capital (investor) and
the user of funds (entrepreneur).

3. It aims at maximizing profit without any 3. It also aims at maximizing profit but
restriction. subject to Shariah restrictions.

4. Lending money and getting it back with 4. Participation in partnership business is

compounding interest is the fundamental the fundamental function of the Islamic
function of the conventional banks. banks. So we have to understand our
customer’s business very well.
PRINCIPLE OF ISLAMIC BANKING
 Prohibition of interest
 Ethical standards

 Moral and social values

 Liability and business risk

DEPOSIT ACCOUNTS

Current accounts

Savings accounts

 Investment account
MODES OF FINANCING OF ISLAMIC BANK
 INVESTMENT FINANCING
 Musharaka

 Mudarabha

 estimated rate of return

 TRADE FINANCING

 Mark-up

  Leasing

 Hire-purchase

 Sell-and-buy-back
 LENDING
 Loans with a service charge

 No-cost loans

 Overdrafts
CONCLUSION

Islamic banking and finance are a part of Islamic economic system, the
basis of which revolves around justice and morality. It is a very young
concept in modern times yet it is emerging as one of the fastest growing
areas of international finance. It facilitates the uplifting of economic
standards of its clients by providing various types of lending contracts.
Above all it is Shari'ah compliant, hence protects a Muslim from dealing
with Riba, thus avoiding Allah's wrath and war. Let us all support Islamic
banking venture, which is being provided by the establishment of Gulf
African Bank. We pray and believe that the bank will strictly stick to
Islamic principles and Shari'ah and uplift the living standards of all those
who endeavour to do so in a decent manner.