FINANCE
OVERVIEW OF FINANCIAL
SYSTEM
CONTENT
2
OVERVIEW OF FINANCIAL
SYSTEM
BANKS AS FINANCIAL
INTERMEDIARIES
ISLAMIC BANKING
GOALS AND OBJECTIVES OF
ISLAMIC BANKING
DIFFERENCES BETWEEN
ISLAMIC BANKING AND
CONVENTIONAL BANKING
SYSTEM
ADVANTAGES OF ISLAMIC
BANKING
CHALLENGES OF ISLAMIC
BANKS
FINANCIAL SYSTEM
3
FINANCIAL SYSTEM
4
Concept of Money
of exchange
Measure of value
Temporary store of value
Concept of Credit/Loan
FINANCIAL SYSTEM
5
Concept of Finance
BANKS AS FINANCIAL
INTERMEDIARIES
6
1.
2.
3.
4.
Promote
savings
and
capital
accumulation to finance projects using
various modes of financing.
Finance international trade.
Mobilize resources for investments for
the benefit of society.
Contribute
social
welfare
through
Corporate Social Responsibilities (CSR)
and zakat.
PRINCIPLES GOVERNING OF
ISLAMIC BANKING
Islam
Aqidah
(Faith and
Belief)
Shariah
(Practices and
Activities)
Akhlak
(Moralities
Ethics)
Ibadat
Muamalat
Political
Activities
Economic
Activities
Banking &
Financial
Activities
S
Ac
ISLAMIC BANKING
8
Optimum Approach
Prohibition of Riba
Riba
Equity participation
Islam
3.
Prohibition of gharar
Gharar
Contractual relationship
Depends
Islamic Banking
System
Charact Conventional
eristics Banking System
Functions and
operating modes
are based on
Shariah law.
Banks have to
ensure that all
business
activities are in
compliance with
Shariah
requirements.
Busines
s
Framew
ork
Each bank
should have a
Shariah
Supervisory
Board to ensure
that all business
activities are in
line with Shariah
requirements.
Functions and
operating modes
are based on
secular principles
and not based on
any religious law
or guidelines.
Risk
Predetermined
sharing rate of interest
Moral
Little attention
Islamic Banking
System
Charact Conventional
eristics Banking System
Zakat
ADVANTAGES OF ISLAMIC
BANKING
1
7
ADVANTAGES OF ISLAMIC
BANKING
1
8
ADVANTAGES OF ISLAMIC
BANKING
1
9
Transparency
CHALLENGES OF ISLAMIC
BANKING
2
0
Divergence of opinions
CHALLENGES OF ISLAMIC
BANKING
2
1
War of talents
22
END OF CHAPTER