Post on 29-Nov-2014
description
Presentation on Islamic Banking
Presented by : Ramesh Sharma (B-28)
Rohit Mishra (B-39)
Prabhat Mani Tripathi (A-
20)
History of Islamic finance
1500 years of development.
During Classical period, commerce flourished under
Islamic commercial law.
Development languished under impact of colonialism and
huge Western firms.
Revival began in 1960’s.
Inception of Islamic Banking
Dubai Islamic Bank - 1975
modest beginnings
Initiated by businessmen who did not want to deal with
interest based system
Hostile environment
History of Islamic finance
Increasing rapid growth and sophistication.
Challenged by conventional banking system
Lack of public awareness
Success Story
300 + Islamic financial institutions
$ 500 - 800 bn in funds
Islamic banking by major academic institutions
Success Story
Important database system (HIFIP)
Standards for the Industry (AAOIFI)
Recognition by IMF, World Bank and Basel Committee
Important Reasons for Global Interest in Islamic Banking
Good opportunity for investment
Challenge to the conventional interest-based Capitalistic
System
Demand of Muslim population in many countries outside
the Muslim world.
Islamic Finance Today
Widely used and flexible tool in international finance.
Devout Muslims have been locked out of many individual
financial vehicles.
Many personal alternatives now available
Religious/Ethical/Legal
In the West, Religion/Ethics/Legal only loosely overlap.
Islamic Sharia’a encompasses all three.
Sharia’a is the body of islamic principles with respect to
life’s activities.
Religious/Ethical/Legal
Derived from three sources:
Quran, revelations from God.
Sunnah, authenticated sayings and actions of the
Prophet (Peace be upon him).
Fiqh, collection of interpretations / rulings / precepts
based on the Quran and Sunnah.
Difference between Islamic and Conventional Modes of Finance
Bank Client
money
money + money (interest)
Conventional
Difference between Islamic and Conventional Modes of Finance
Bank ClientGoods & Services
money
Islamic
Structure of Hierarchy
Major Contracts Used in Islamic Banking
Buying & Selling
Mudaraba: Investment management
Musharaka: Partnership
Ijarah: Leasing
Wakalah: Agency
Istisna’: Contract of works
Objective Of Islamic Banking:Banking Without Riba
The main objective of an Islamic Bank is to prohibit
Muslims from dealing with interest or usury (Riba) which
has been strictly prohibited by Allah, and to protect them
from one of the biggest sins
Dubai Islamic Bank Statement
Islam
Aqidah(Faith and Belief)
Shariah(Practices and Activities)
Akhlaq(Moralities and Ethics)
Principles Governing
Shariah Requirements
Avoidance of prohibitions
Ensuring that the contract have all their essential
elements with their necessary conditions
Shariah Requirements
The prohibitions are:
Producing and trading of impure materials,
Producing and trading of materials which are of no
use,
Gharar,
Riba ands
Involvement of gambling
Strategies
Financial services are growing fast in the world.
Year 1998 the finance institution and insurance represented
7.98% from GDP of UAE
Year 2001 the finance sector had grown to reach 11%,
which shows the level of financial services in the country.
This presentation includes information about the PEST
Analysis
Focus Areas
Worldwide Statistics
Market Performance
Strategic Difference
Principles & values Known and trusted for our high standards of corporate
responsibility, we are committed to building a sustainable business through social inclusion, environmental protection and good governance.
PEST Analysis
Political Factors
Economic Factors
Socio culture factors
Technical Factors
Five Forces Model
Threat of New entrants
Rivalry among Existing firms
Bargaining power of buyers
Bargaining power of suppliers
Threat of Substitute products or services
Threat of New entrants
Economy of Scale
Product Differentiation
Legal Barriers
Rivalry among Existing firms
Equally balanced
Competitors
Lack of differentiation
Diverse Competitors
Bargaining power of buyers
Size of buyers
Differentiation
The buyer has full
information
Bargaining power of suppliers
Concentration or Size of Suppliers
Differentiation
Switching costs
Threat of Substitute products or
services