View source for Islamic Banking-A variation of Conventional Banking by Moham




== Top 20 FREQUENT WORDS ==
islamic 104
banking 70
banks 59
financial 57
conventional 37
risk 31
profit 29
assets 24
financing 22
pre 18
activities 17
finance 17
profits 17
business 16
sharing 16
agreed 14
income 14
loans 14
products 14
considered 13
equity 13
ethical 13
investment 13



== DOCUMENT KEY POINTS ==
*

*binding principles of financial transactions ethical principle is that the profits earned by a bank from its activities and returns made by a bank to the depositors shall be a from sharing of risk in the project and b profit share agreements and not pre agreed fixed interest payments which is considered as prohibited earnings because pre agreed interest agreement has no sharing of risk of investment of money
*in the case of islamic bank like activities too newer form of financial activities undertaken by banks are licensed separately islamic mutual funds islamic index funds islamic development bank islamic or takaful insurance etc

*underlying the entire tenet of the financial transactions of this form of banking are two requirements a reward in a moneybased transaction must be the result of profit shares from sharing in the risk of the outlay and not pre agreed and fixed reward regardless of the consequence of investment and that any financial transaction that is doubtful of ensuring long term societal well being is considered disallowed

*besides the reward to equity is larger the larger the risk of the bank shareholders of macquarie bank which is a highly risky investment bank earn twice as much as the shareholders of commonwealth bank of australia a less risky bank in a typical year
*table a simple classification of islamic banking using financial statements financial statement items conventional bank islamic bank panel a performance of a bank profit loss net interest income net income profit shares a financial services income financial services incomea capital gains capital gains less less operating expenses operating expenses amortisation of goodwill amortisation of goodwill charge for doubtful loans charge for doubtful loans gross profits gross profitsa income taxes income taxes net profits net profitsa C monash business review volume issue a april

*panel b financial position of a bank balance sheet assets loans and advances loans advancesb after provisions for npl after provisions for npl fixed assets fixed assets total assets total assets total risk weighted assetsc total risk weighted assetsc a liabilities and deposits other borrowing deposits other borrowing bonds notes subor debt bonds notes subor debtb floating rate notes floating rate notesb shareholder capital ordinary shares ordinary shares musharaka equity instruments equity instruments total equity total equity musharaka a income earned by an islamic bank is from profit shares services fee and the excess over all expenses

*both these countries appear to be doing the big ticket islamic banking and their major banks have begun to join in the chase for a slice of the business citigroup hsbc ubs dresdnerbank abn amro are the big ticket banks doing large ticket banking and importantly having the expertise to financially engineer new products that are exciting for the customers with deeper pockets but demanding islamic financial products
*apart from their compliance with the laws licensing operation laws prudential supervision laws international supervision rules these supra national bodies provide a degree of standardization in accounting treatments of numbers accounting and auditing standards organisation for islamic financial institutions aasoifi in financial service provision islamic financial services board which also works with the bis on basel ii and on capital adequacy


 ''Please note, This is an auto generated summary based on sentances position in the document and other factors''
== DOCUMENT WORD ANALYSIS ==
=== Main Category ===
: AlHuda Material\islamic banking


=== KeyWords ===
islamic banks banking financial finance investment conventional institutions funds risk financing deposits assets services management international countries equity profit products



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== DOCUMENT REFERENCES ==


=== Number of Pages ===
8


=== Published Date ===
2007-10-23 09:47:46


== Full Document ==


[https://www.hodhood.com/en/HodHoodDocuments/IslamicFinance/IslamicBanking/Islamic%20Banking-A%20variation%20of%20Conventional%20Banking%20by%20Moham.pdf Read the Full Document]


[[Category:Islamic Finance]]

[[Category: Islamic Banking]]