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    Islamic Banking: By: Soukaina Ikbal & Chaimae Benyahya

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    Kenza Hazzaz
    Islamic banking operates according to Sharia (Islamic law) which prohibits interest-bearing loans. Instead of conventional interest-based loans, Islamic banks engage in profit and loss sharing arrangements like murabaha (cost-plus financing), musharaka (joint venture partnerships), or mudaraba (trustee financing). Islamic banks also require collateral equal to the transaction value and a large down payment from buyers. Major differences from conventional banking include prohibiting interest, discouraging harmful economic activities, and introducing an Islamic tax. Examples of Islamic banks include Al Baraka D'Algerie in Algeria and Maybank Islamic in Malaysia.

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    Islamic Banking: By: Soukaina Ikbal & Chaimae Benyahya

    Uploaded by

    Kenza Hazzaz
    60 views10 pages
    Islamic banking operates according to Sharia (Islamic law) which prohibits interest-bearing loans. Instead of conventional interest-based loans, Islamic banks engage in profit and loss sharing arrangements like murabaha (cost-plus financing), musharaka (joint venture partnerships), or mudaraba (trustee financing). Islamic banks also require collateral equal to the transaction value and a large down payment from buyers. Major differences from conventional banking include prohibiting interest, discouraging harmful economic activities, and introducing an Islamic tax. Examples of Islamic banks include Al Baraka D'Algerie in Algeria and Maybank Islamic in Malaysia.

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    Islamic Banking 1

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    Islamic banking operates according to Sharia (Islamic law) which prohibits interest-bearing loans. Instead of conventional interest-based loans, Islamic banks engage in profit and loss sharing arrangements like murabaha (cost-plus financing), musharaka (joint venture partnerships), or mudaraba (trustee financing). Islamic banks also require collateral equal to the transaction value and a large down payment from buyers. Major differences from conventional banking include prohibiting interest, discouraging harmful economic activities, and introducing an Islamic tax. Examples of Islamic banks include Al Baraka D'Algerie in Algeria and Maybank Islamic in Malaysia.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    60 views10 pages

    Islamic Banking: By: Soukaina Ikbal & Chaimae Benyahya

    Uploaded by

    Kenza Hazzaz
    Islamic banking operates according to Sharia (Islamic law) which prohibits interest-bearing loans. Instead of conventional interest-based loans, Islamic banks engage in profit and loss sharing arrangements like murabaha (cost-plus financing), musharaka (joint venture partnerships), or mudaraba (trustee financing). Islamic banks also require collateral equal to the transaction value and a large down payment from buyers. Major differences from conventional banking include prohibiting interest, discouraging harmful economic activities, and introducing an Islamic tax. Examples of Islamic banks include Al Baraka D'Algerie in Algeria and Maybank Islamic in Malaysia.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 10

    Islamic Banking

    BY: SOUKAINA IKBAL & CHAIMAE BENYAHYA


    Plan:

     What is Islamic Banking ?


     Principle of Islamic Banking.
     Differences between islamic and
    conventional banking.
     Islamic Banking methods.
     Some examples of Islamic Banks in
    the world.
    Islamic Banking:
     Islamic bankings, is banking activity that is consistent
    with the principles of SHARIA and its practical application
    through the development of Islamic economics. As such,
    a more correct term for 'Islamic banking' is 'Sharia
    compliant finance'. Sharia prohibits the fixed or floating
    payment or acceptance of specific interest or fees (..) for
    loans of money. Investing in businesses that provide
    goods or services considered contrary to Islamic
    principles is also  prohibited. Although
    these principles, have been applied in varying degrees by
    historical Islamic economies due to lack of Islamic
    practice, only in the late 20th century were a number of
    Islamic banks formed to apply these principles
    to private, or semi-private commercial institutions within
    the Muslim community.
    Principle of I.B:
     To comply with the laws concerning interest, Islamic banks
    often require a large down payment on property or goods
    being purchased. They may also require collateral equal to
    the value of the transaction. Instead of granting “loans” in the
    conventional way, a bank will purchase the goods or
    property from the seller and enter into an agreement with the
    buyer to sell it to them at a higher price. Since this is an
    exchange of goods, not money, the banks are allowed to
    enter into this transaction and make a profit. This is known
    as Murabaha (cost plus) and is how all property is
    purchased through a Sharia compliant bank. Islamic banks
    do not issue mortgages.
     These transactions can fall under specific categories and
    practices: e.g safe Keeping (Wadiah) is where the customer
    transfers funds to the bank to hold (Keep) until their debt is
    repaid. During that time the bank is allowed to invest those
    funds to generate a profit for the bank. 
    Methods of I.B:
    Musharaka: Financial transactions in which
    the investment made is based on equity
    participation. All partners have a financial
    stake in the company and the right to a pre-
    determined percent of the profits.
    Mudharaba: Owner of the capital is the bank
    or moneylender, who is able to determine a
    percent of profit. Like Musharaka, the actual
    return is unclear as it depends upon the final
    profit.
    Murabaha: Financial product, similar to trade
    finance in the context of working capital loans
    and to leasing in the context of a fixed capital
    loan. The institution buys goods and resells
    them to entrepreneurs for the cost of the
    goods plus a fixed markup for administration
    cost. The financing entity owns the goods
    until the last installment is paid.
    Differences between islamic and
    conventional banking:
     * The absence of interest-based
    transactions.
     * The avoidance of economic activities
    involving oppression and speculation.
     * The introduction of an Islamic tax.
     * The discouragement of the production
    of goods and services which contradict
    the Islamic value.
    Examples of I.B:
     ALGERIA: Banque Al Baraka D’Algérie.
     BAHRAIN: Al Baraka Islamic Bank Bahreïn.
     EGYPT: Faisal Islamic Bank of Egypt.
     LEBANON: Al Baraka Bank Lebanon
     MALAYSIA: Maybank Islamic Berhad
     TURKEY: Kuveyt Türk.
     UNITED KINGDOM: Bank of London and the Middle
    East
     UNITED STATES: American Finance House Lariba
    Thank’s a lot for paying
    attention.

    The End .

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