Study of islamic banking system
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Transcript of Study of islamic banking system
Study Of Islamic Banking System
Presented by :Abdinasir Ahmed Ali
Presented to :
Mr. Md. Shahnur Azad Chowdhury
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CONTENTS• INTRODUCTION• FUNCTIONS & SERVICES• FINANCIAL PERFORMANCE ANALYSIS• CONCLUSION
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Islamic banking is a banking activity that follows the principles
of shariah and its practical application through the development
of Islamic economics.
INTRODUCTION
INTRODUCTION• First security islami bank limited (FSIBL)• Incorporated in Bangladesh on 29 august 1999 • Started islamic banking system in 2008
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INTRODUCTION
Vision of the FSIBL• To be a unique modern islami bank in Bangladesh • To make significant contribution to the national
economy
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Functions & Services of FSIBL
Functions of FSIBL
General Banking
Account opening section
Clearing section
Cash section
Remittance
Investment
Functions of FSIBL
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Current Account [CD A/C] or Al-Wadiah Current
Al-Wadiah means to receive something for safe custody.
Receiving money by banks from the clients for safe custody with the
condition to return the money on demand.
The bank can use the money at its own risk. So the Depositor(s) does
not share any profit or loss on funds kept in the AWCA.
Functions of FSIBLProducts of FSIBL
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Saving Account [SB A/C] or Mudarabah Saving A/C
Al-Mudarabah as a contract between two parties‖, in which one party
is called Sahib-Al-Maal, i.e. owner of the fund, and the other party is
called Al-Mudarib, the investor/entrepreneur.
But the entire financial losses, if any, shall be carried only by the
Sahib-Al-Maal .
A minimum balance of Tk. 500/= must be maintained all the time in
the account.
Functions of FSIBLProducts of FSIBL
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Mudarabah Fixed Deposits Account [FDR A/C] It is fixed deposit.
Repayable after the expiry of a predetermined period fixed by the client.
Period varies from one month to 12 months.
Fixed Deposit Accounts for
•One month and above but less than 3 months ––8% .
•Three months –11.5% .
•Six month and above -12% .
Functions of FSIBLProducts of FSIBL
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Mudarabah Monthly Deposit Scheme (MMDS) Encourage all class of people for building an important habit of
saving.
One can save a fixed amount of money every month.
Functions of FSIBLProducts of FSIBL
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Mudarabah Double Benefit Scheme (MDBS) Keep for a period of five years & nine month.
The total amount will be double in the following period.
Functions of FSIBLProducts of FSIBL
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Mudarabah Triple Benefit Scheme Kept for a period of nine years & six month.
The total amount will be triple.
Functions of FSIBLProducts of FSIBL
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Mudarabah Fourth Terms Growth Kept for a period of eleven years & nine month.
Total amount will be fourth.
Functions of FSIBLProducts of FSIBL
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Musharakah (joint venture) Musharakah is a relationship between two parties or more that
contribute capital to a business and divide the net profit and loss pro
rata.
The profit is distributed among the partners in pre-agreed ratios,
while the loss is borne by each partner strictly in proportion to
respective capital contributions
Functions of FSIBLInvestment scheme of FSIBL
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Murabahah This concept refers to the sale of good (such as real estate,
commodities or a vehicle) where the purchase and selling price,
other costs, and the profit margin are clearly stated at the time of the
sale agreement
With a fixed rate of profit determined by the profit margin for the
purchase of a real asset, this is a fixed-income loan. The bank cannot
charge additional profit on late payments. However, the asset
remains as a mortgage with the bank until the default is settled.
Functions of FSIBLInvestment scheme of FSIBL
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Mudarabah "Mudarabah" or Profit-and-loss sharing contract is a kind of
partnership where one partner gives money to another for investing it
in a commercial enterprise.
Profits generated are shared between the parties according to a pre-
agreed ratio. If there is a loss, the first partner "rabb-ul-mal" will lose
his capital, and the other party "mudarib" will lose the time and effort
invested in the project
Functions of FSIBLInvestment scheme of FSIBL
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Bai' muajjal (credit sale) Literally bai' muajjal means a credit sale.
Technically, it is a financing technique adopted by Islamic banks that
takes the form of murabahah muajjal. It is a contract in which the
bank earns a profit margin on the purchase price and allows the buyer
to pay the price of the commodity at a future date in a lump sum or in
installments.
The price fixed for the commodity in such a transaction can be the
same as the spot price or higher or lower than the spot price.
Bai' muajjal is also called a deferred-payment sale.
Functions of FSIBLInvestment scheme of FSIBL
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Bai Salam Bai salam means a contract in which advance payment is made for
goods to be delivered later on.
The seller undertakes to supply some specific goods to the buyer at a
future date in exchange of an advance price fully paid at the time of
contract.
The objects of this sale are goods and cannot be gold, silver, or
currencies based on these metals.
Functions of FSIBLInvestment scheme of FSIBL
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Istisna Istisna (Manufacturing Finance) is a process where payments are
made in stages to facilitate the work of manufacturing / processing /
construction. An installment of Istisna, for example, may enable a
construction company to finance construction of sections of a
building or help manufacturers pay for an order of raw materials.
Istisna helps use of limited funds to develop higher value
goods/assets in different stages / contracts.
Functions of FSIBLInvestment scheme of FSIBL
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Ijarah Ijarah means lease, rent or wage. Generally, the Ijarah concept refers
to selling the benefit of use or service for a fixed price or wage.
Under this concept, the Bank makes available to the customer the use
of service of assets / equipment such as plant, office automation,
motor vehicle for a fixed period and price.
Functions of FSIBLInvestment scheme of FSIBL
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Performance indicators for last five years
Financial Performance Analysis
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Performance indicators for last five years
Financial Performance Analysis
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Financial Performance AnalysisPerformance indicators for last five years
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Performance indicators for last five years
Financial Performance Analysis
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Performance indicators for last five years
Financial Performance Analysis
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ConclusionSWOT analysis of FSIBL
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Strengths:– Bank reputation– Islamic banking Concept– Modern branches– Team work at mid-level and lower level
Conclusion
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Conclusion
Weaknesses:− Advertising and promotion of their new product− Low reward package− Time wastage− Lack of on- line Service
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Conclusion
Opportunities:– Diversification– Promotion of new Products– Market share
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Conclusion
Threats:– Many competitors in the market– Many of the competitor banks are well equipped & also
providing better online services – Changing customers needs – The growth rate of competitors in the market.
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Conclusion
Discussion:– It has established goodwill through innovative products and services.
– We have tried to present the functions of First Security Islami Bank
Limited and its products & services
– finally tried to give some suggestion for the improvement of First
Security Bank Limited
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