Islamic Banking Final

Islamic Banking Presented By: Group 11

Agenda • Facts • Islamic banking • Activities of Islamic banking – Financing Activities

• Difference b/w conventional and Islamic Banking • Islamic banking in India

Some Facts • First Islamic Bank established in Egypt in 1972 • More than 250 Islamic Financial Institutions in 27 Muslim countries and 16 Non Muslim countries • Islamic Banking global estimates US$400Bn+

What is Islamic Banking? • Banking practices consistent with Islamic law • Islamic law prohibits – Riba – Exploitation – Investment in unlawful activities such as betting

• Offers services to both muslims and

Activities • Deposits – Saving Accounts

• Financing – – – – – –

Murabaha Ijaraha Musharakah Mudarabah Salam Istisna

• Services

Financing Activities

•

Sale of mutually agreed profit

Vendor

Islamic Bank

Custome r

Vendor

Islamic Bank

Custome r

70% Ownership

Musharak ah

30% Ownership

• Customer buys out bank’s share over a period of time • Share profits according to agreed proportions • Losses on their capital contribution

Commodi ty Owner

Islamic Bank

Custome r

Manufactur er

Islamic Bank

Customer