Professional Documents
Culture Documents
.conventional Banking :A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly or through capital markets.
The absence of interest-based (riba) transactions; * The avoidance of economic activities involving oppression (zulm) * The avoidance of economic activities involving speculation (gharar); * The introduction of an Islamic tax, zakat; * The discouragement of the production of goods and services which contradict the Islamic value (haram)
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Conventional banking is essentially based on the debtor-creditor relationship between the depositors and the bank on one hand, and between the borrowers and the bank on the other. Interest is considered to be the price of credit, reflecting the opportunity cost of money.
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2. 3.
Procedures
Interest Uncertainty
4. Speculation
5. Unlawful Products 6. Unlawful Services
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Deposits
Financing
Services
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1.Real estate loan 2.Financial institution loan 3.Industrial loan 4.Individual loan Every kind of loan are related with interest .
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Transfer of title to bank VENDOR ISLAMIC BANK Payment of purchase price (P)
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ISLAMIC BANK
PARTNER (Customer)
60% Ownership
40% Ownership
MUSHARAKA
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Mudarabaha: The bank provides to the customer (mudarib) all the capital to fund a specified enterprise. The customer contributes only entrepreneurship
CLIENT (Mudarib)
Investor of Capital ISLAMIC BANK Payment of Mudarabah Capital
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Some type form of financing of conventional Bank: 1.Real estate loan :these loans are secured by real property.
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