Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
2 Days Specialized
Training Workshop on
Islamic Micro Finance
6th Global Islamic
Microfinance - Kenya
Rulings In Islam
These 5 primary objectives follow by
Shariah can be observed though the Al
Ahkam (rulings) upon which Fiqh (Islamic
Jurisprudence) rotate around. The rulings
are categorized as follows:
a. Wajib (obligatory)
e. Haram (unlawful)
b. Mustahab (recommended) (Sunnat)
c. Mubah (permissible)
d. Makruh (disliked)
Rulings
Wajib- An obligatory action or something that
shall be performed. Anyone who leave it is
liable to gain the punishment of Allah s.w.t. in
the Here after as well as a legal punishment in
this world.
Haram- An unlawful action or the one that shall
not be performed and is strictly prohibited.
Anyone who engages in it is liable to gain the
punishment of Allah s.w.t. in the Here after as
well as a legal punishment in this world.
Mustahab- A recommended action or something
that should be performed.
Mubah- A permissible action or something that is
neither encouraged nor discouraged.
Makruh- A disliked action or something which is
abominable and should be avoided but not in
strictly prohibitory terms.
Aqidah
(Faith & Belief)
Shariah
(Practices & Activities)
IBADAT
(Man to God Worship)
Political Activities
Akhlaq
(Morality & Ethics)
Muamalat
(Man to Man Activities)
Economic Activities
Social Activities
Others Capital
Equity Financing
Debt Financing
Equity Financing
Al-Musharakah (Joint
Venture Profit Sharing)
Debt Financing
Uqud al-Muawadhat
(Deferred Contracts of
Exchange)
Al-Mudarabah
(Trustee Profit Sharing)
Others
Equity Market
Debt Market
Bai al-Murabaha
(Cost Plus Profit Sale)
Al-Ijarah (Leasing)
Bai al-Salam (Commodity
Sale)
Bai al-Istisna (Sale on Order)
WHAT IS ISLAMIC
BANKING?
WHAT IS BANK?
The name bank derives from the
Italian word banco "desk/bench.
In practice, the word Bank means an
institution which borrows money from
people and lends money to people for
interest or profit and provided other
financial services.
Accepting money
Lending money
Conventional Banking
Conventional Banks take deposit on interest
basis and lend on the basis on interest. A part
of interest is paid to the depositors and the
remaining interest is left for the bank as its
income. If this residual is more than its
expenses, it will have Net Income otherwise it
will have Net loss.
Islamic Banking
Islamic Banking accepts deposits on PLS basis
and invest in Shariah based modes. Whatever
is the profit, it is shared with depositors. If
there is a loss it will also be shared.
14
OBJECTIVES OF ISLAMIC
BANKING
DEPOSITS
CATEGORIES OF DEPOSIT IN
ISLMIC BANKING
The Shariah option for deposit
mobilization can be worked out by
respecting two principles:
1.
2.
Definition of Qard
Definition of Amanah
Shirkah
MEANING OF SHAIRKAT
Shirkat-ul-Ammwal
Definition:
It is an agreement between two or
more persons to invest a sum of
money in a business and share its
profits according to agreement. The
investment
of
this
partnership
consists of capital contributed by the
partners.
SHIRKAT-UL- AMWAL:
Capital of Musharakah
It should be known, ascertained and available at
the time of contract.
Management of
Musharakah
Distribution of Profit
The ratio of profit distribution must be agreed
at the time of execution of the contract.
It is not necessary for sharing profit according
to proportionate capital contribution;
It is not allowed to defer the determination of
profit until realization of profit.
The ratio must be determined as a proportion
on the actual profit earned by the enterprise.
1.
2.
Rules of Loss
Determination/Distribution
Sharing of Loss:
MUDARABAH
Capacities of Mudarib
Mudarib has different capacities for
which rules are different. Listed down
are his roles:
Ameen (trustee):
Mudarib holds money and assets of Mudarabah as trustee;
Therefore, he is responsible for management of assets
honestly;
In case of actual loss he is responsible for nothing;
Wakeel (Agent):
Mudarib manages Mudarabah as an agent of owner;
Therefore his actions are considered as of Rabbul Maal;
Actual loss is born by Rabbul Maal in case it happens;
Shareek (partner):
Mudarib becomes partner in the profit that Mudarabah
generates;
specific;
Mudaraba Vs Musharaka
. Mudaraba:
1. The
contribution
comes from Rabbul
Maal (the investor);
2. The
Rabbul
Maal
(investor)
is
not
permitted to manage
the business;
3. The Mudarib manages
the business only;
4. The Mudarib can also
invest in the capital of
Mudarabah.
Musharaka:
1. The contribution comes
from all partners in
form
of
cash,
commodities, services
or liability in case of
reputation partnership;
2. The work, as a general
rule, is to be done
jointly by the parties;
3. A partner or some
partners
may
be
sleeping;
CATEGORIES OF DEPOSIT IN
ISLMIC BANKING
Investment Account
Depositors
Current Account
Fixed Investment
Accounts
Security Deposit
Deposits Account
COMPONENTS OF VALID
SALE
SALE
CONTRACT
Offer/Acceptance
Buyer/Seller
SUBJECT
MATTER
Existence
Ownership
Possession
PRICE
Physical
Constructive
Certain
Valuable
Halal Purpose
35
POSSESSION
Types of sale
sale;
36
Musawamah
Musawamah is a general kind of sale in
which price of the commodity to be
traded is stipulated between seller and
the buyer without any reference to the
price paid or cost incurred by the
former. Thus it is different from
Murabaha in respect of pricing formula.
Unlike Murabaha, seller in Musawamah
is not obliged to reveal his cost.
37
Murabaha
FEATURES OF
BANKING MURABAHA
Murabaha finance is not a loan
given on interest, it is a sale of
Asset(s) for cash/deferred price.
It is the obligation of the Seller
to disclose the Cost and Profit to
the Buyer.
39
FEATURES OF
BANKING MURABAHA
FEATURES OF
BANKING MURABAHA
Scope of Murabaha
42
VARIOUS
MODELS OF
MURABAHA
FINANCE
43
MODEL - I
MODEL - II
MODEL - III
MODEL - I
45
Customer
46
Bank/Vendor
MODEL I - PHASES
Phase 1:
The customer approaches Bank (Vendor)
and identifies Asset(s) and collects relevant
information including cost and profit.
Phase 2:
Bank sells Asset(s) to the Customer,
transfer risk and ownership to the Customer
at certain Murabaha Price.
Phase 3:
Customer pays Murabaha Price in lump sum
or in installments on agreed dates.
47
MODEL - II
In
The
48
MODEL II
The
There
49
MODEL II GRAPHICAL
PRESENTATION
Customer
50
Vendor
5
2
6
3
4
Bank
MODEL II - PHASES
Phase 1:
Customer identifies and approaches the
Vendor or Supplier of the Asset(s) and
collects all relevant information.
Phase 2:
Customer approaches the Bank for
Murabaha Financing and promises to buy
the Asset(s).
Phase 3:
The Bank makes payment to vendor
directly.
51
MODEL II PHASES
Phase 4:
Vendor delivers the Asset(s) & transfers
the ownership of Asset(s) to the Bank.
Phase 5:
Bank sells the Asset(s) to Customer on
cost plus basis and transfers ownership.
Phase 6:
53
It
54
55
Vendor
5
5
2
Bank
Customer
6
Offer
Acceptance
1
56
Order Form
Agency Agreement
Purchase
Possession
Ijarah
Ijarah
Liabilities of Parties
Lessor Responsibilities:
Since corpus of leased property remains
in the ownership of the lessor therefore all
liabilities of ownership are borne by lessor.
Expenses:
As the lessor is the owner of the asset
he is liable to pay all the expenses incurred in
the process of its purchase and its import to
the country of the lessor example expenses
of shipment and customs duty etc.
63
Lessee Responsibilities:
Lessee as Ameen:
The
lessee
is
liable
to
compensate the lessor for every
harm caused to the leased asset by
his misuse or negligence.
65
Rental
Rental
68
Termination: contractual
Termination: contractual
70
Agency Agreement
Purchase
Lease Agreement
Manufacturer /
Supplier
Customer
2. Execution of
Ijara Agreement
Lease
possible
4. Bank
appoints the
Customer as its
agent to buy
the property.
Bank
Financing Capital
Expenditure
5-7 years
Risks:
Credit Risk
Performance Risk
Cost Overruns
Ownership Risk
Diminishing Musharakah
Diminishing Musharakah
(DM is a type of Shirkah where one
partner purchases the other
partners share gradually
FEATURES OF DIMINISHING
MUSHARAKAH
Diminishing Musharakah in
Shirkat ul Milk with Ijarah
Diminishing Musharakah in
Shirkat ul Milk with Ijarah
Diminishing Musharaka
Ownership Transfer
Diminishing Musharaka
Monthly Rentals
Rs
Procedure of DM
D M Agreement (Bank +Client)
Diminishing Musharakah
Once the customer has purchased all of the Banks share the
ownership will transfer to the customer with free and clear title
to the vehicle
Bank
Equity
Operational Expenses
POOL OF
FUND
S
PLS
Depositors
Investmen
t
Income/
Loss from
Investmen
t
SBP
Current
Deposit
Current
Deposit
Income
from
non fund
business
Idle fund
Distributabl
e
Income
Depositor
s
PLS
Reserves
Equity
Conventional Banking
Islamic Banking