TITLE : ISLAMIC BANKING

LECTURER NAME : MARDZIYAH MOHD

ISA

PROVIDE BY : Muhammad Luqman Aidiel Bin

Adnan
Before explaining the concept “what is
Islamic Banking” the elaboration of
concept “why Islamic Banking” is very
important.
Islam is a complete code of life that
provides guidance regarding each aspect
of life
The primary objectives of Islamic Economic System are as under.

Equal Distribution of wealth

Social justice

These objectives can never be achieved in Interest/Riba based economic

systems.
 Islamic Banking provides services to its customers free
from interest,and the giving and taking interest have
prohibited in all transaction.

Islam bans Muslims from taking interest (in arabic terms

for which is RIBA).

This prohibition makes an Islamic banking system differ

fundamentally from a conventional banking system.
Definition
 Islamic Banking refers to a system of banking or
banking activity that is consistent with Islamic
Law(Shariah) and guided by islamic economics.

 Islamic Law prohibits the collection and payment of

interest,also commonly called RIBA in Islamic discourse.

 Islamic Law derived from

Quran,Sunnah,Ijma,Ijitihad.Theses source act the major
guidance of (Fiqh Mualamah) which governs all baking
transactions.
 Objective Islamic Banking
to develop the Islamic capital market

to open up opportunities for Muslims to generate as much capital as

possible.

to assist in the development of the Islamic economy in a well-organized and

clean manner than forbidden elements such as riba, gharar, maysir.

"The main objective of Shariah is to improve the welfare of the people by

preserving their faith, their lives, their intelligence, their zuriat and their
property. The thing that can safeguard that preservation will be to fulfill
public interest and to be coveted. (AL-GHAZALI)
 .
TYPES OF BANKING PRODUCTS AND
SERVICES

PARTNERSHIP RENTAL BASED

BASED MODES MODES OF
OF FINANCING TRADE BASED FINANCING
MODES OF
MUDARABAH FINANCING
MUSHARAKAH IJARAH
(Profit loss-
(Join Venture) (Leasing)
sharing)
MURABAHAH
SALAM
(COST PLUS)
 ISLAMIC BANKING
Profit on exchange of goods & services is the
basis for earning profit
Based on Shariah Laws
Loss is shared when the organization suffers
losses
Charge compensation for delays but the money is
not included in the bank's income, but is channeled
directly to charity.
Bank and customer relationships are sellers,
buyers or partners
CONVENTIONAL BANKING
time value basis for charging interest on capital
Based on man-made laws
Interest is charged even in case, the organization
suffers losses.Thus no concept of sharing loss
Apply additional penalties on the loan if late
payment.
Bank and customer relationships are lenders and
borrowers.
List of Islamic Banking in Malaysia
 Bank Islam
Bank Muamalat
 CIMB Bank Islamic
 Public Islamic Bank
 Affin Islamic Bank Berhad
 RHB Islamic Bank
 Hong Leong Islamic Bank
 THE IMPORTACE OF ISLAMIC
BANKING
Modern banking base on interest and biased in favors of the capitalist
and rich and well-to-do, is rejected as un-Islamic because our country
try to build a banking systems with the basic and being foundation by
Islam.

Islam as al-Deen is not just a religion but also a set of beliefs,

thoughts and aspects of life that creates a balance equilibrium
between worldly and spiritual elements.

Without islamic foundation the country will not get the blessing from
the God in the world and the hereafter.
 CONCLUSION

 Basically, stand base on Islamic Banking institution is a

must.However, each activity to be implemented should be reviewed
carefully so as not to conflict with islamic law.recovery in the
economy as a whole must be borne by the goverment so that justice
can be applied in the lives of muslims as a whole.
 REFERENCES
BOOK
*Haron, Sudin (1996) Principles and Operations of IslamicmBanking
Selangor, DarulEhsan, Malaysia: Berita Publishing.
*Haron, Sudin,B.Shanmugam (1997),Islamic Banking System: Concept
and Applications, Pelanduk Publications (M) Sdn Bhd, Petaling Jaya.

INTERNET
* https://www.globalbankingandfinance.com/list-of-islamic-
banks-in-malaysia/
* https://www.globalbankingandfinance.com/list-of-islamic-
banks-in-malaysia/