PROGRESS AND

CHALLENGES OF
ISLAMIC BANKING

BY :
AHMAD DZAKI YUDDI N - 12010013
I NT AN BUDI HAPS ARI - 12010009
S I T I RAHAYU - 12010001




REVIEW ABBAS MIRAKHORS JOURNAL :
THI S PERI OD HAS SEEN A SURGE OF
I NTEREST I N THE ANALYTI CAL AND
OPERATI ONAL ASPECTS OF I SLAMI C
BANKI NG AFTER EGYPT, I RAN, PAKI STAN,
AND SUDAN OPTED FOR AN I SLAMI C
BANKI NG AND FI NANCI AL SYSTEM.

THE SPEED OF GROWTH OF I NTEREST-
FREE
FI NANCI AL I NSTI TUTI ONS,
TRANSACTI ONS, AND I NSTRUMENTS
HAS BEEN I MPRESSI VE.




INTRODUCTION :
THEORY DI VI DED I NTO 2 ( TWO) EQUAL PERI ODS :
1 ) CONSENTRATED THE CONSCI OUSNESS OF
RI BA AND GHARAR.
2 . ) USE THE PROF I T- SHARI NG MECHANI SM.





A BRIEF HISTORICAL REVIEW OF
THEORY AND PRACTICE :
1 . THESE FUNDS WERE LOCATED I N THE
MAS AJ I DS .
2 . MAKE THE FI NANCI AL CO- OPS OR CREDI T
UNI ONS OF FUNDS WERE USED FOR
CONSUMPTI ON PURPOSES.
AND THE PRACTICE DIVIDED
INTO 2(TWO) KINDS :
DEVELOPMENT TO
FINANCIAL THEORY
AND ISLAMIC BANKING
Financial Risk
How to measure it
How to mange it
RESULT OF FINANCIAL THEORY ON
LATE 1950S AND MID-1980S

Standart Modigliani-Miller
Modern portfolio theory
The concept of capital market imperfection
Modern contract theory
BIG QUETIONS
Why did banks develop ?

Traditional
1. Intermediate between the preference of lender
and borrowers
2. Operating at high volumes
3. Benefit from lower their average cost incurred
MODERN
Invesment depends crucially on the availability of
credit
There is a relation between individual and providing
credit
WHY WERE ALL THEIR OPERATIONS
BASED ON FIXED-FEE CONTRACT ???
Necessity of interest rate ceilings, control, and
regulations
The real values of assets and liabilities would be
equal at all points in time
The prospect of instantaneous equilibrium
Determines the rate of return to the financial sector
rather than the reserve
Adjustment to shock
There will be no disruption in banking system


DATA COLLECTIONS
a. Customers
b. Depositors
c. Local Comunities
d. Employees
e. Managers
f. Regulator
g. Shariah Advisors
Target groups Distribut
ed
Usable
returned
&
complet
ed
Respons
e
rate(per
cent)
Methodology
Customers 400 367 92 By Hand(Fieldwork)
Depositors 400 383 96 By Hand(Fieldwork
Local
Comunities
400 280 70 By Hand(Fieldwork
Employees 400 335 84 By Hand(Fieldwork
Branch
Managers
134 100 75 Mail
Regulators 36 25 69 Mail
Shariah Advisors 10 10 100 Mail
Total 1780 1500 84.27
TARGETS GROUPS, METHODOLOGY USED AND RENPONSE
RATE

Savings and invesment
Monetary policy
Open economy contacs
Open economy contacs again
Adopting Financial System
OPERATIONAL AND CHALLENGES
1. Interest( deposits)
2. Profits

CONCLUSION
Developing main menu of Shariah compatible
Introduced Inter alia
Reduce The cost risks nd uncertain monetary or
fiscal regime
Price stability