Islamic banking – Theoretical Islamic banking – Theoretical modelmodel Prohibition of Riba.

Importance of Bank in modern world of business

Dilemma is how to restructure banking system in order to conform to the requirements of muslim world.

Islamic resurgence movement from 1970’s onward.

The council of Islamic ideology - RecommendationsThe council of Islamic ideology - Recommendations

Submission of provisional report to government for the elimination of Riba from economy.

Financing modes permissible in Shariah. Musharakah Mudarabah Bai-Muajjal Bai-Salam Ijara Hire-Purchase Agreement Murabaha Provision of Services on commision

Commercial banking in Islamic Commercial banking in Islamic PerspectivePerspective

Model of Islamic banking consit of two-tier Mudarabah system.

1) Depositor – Liability Side

2)Asset Side (Mudarabah or Musharakah)

Different Views of EconomistDifferent Views of Economist

Pessimistic

Optimistic

Central Banking and Monetary Central Banking and Monetary PolicyPolicy How the central bank of an islamic economy would

control credit and implement its policy in the absence of the institution of interest.

Three major Objectives of monetary policy 1)stability in the value of money 2)economic prosperity with full employment 3)promotion of distributive justice

Islamic Banking PracticeIslamic Banking Practice

Summit conference in Mrocco 1969.

Islamic Development Bank Jeddah S.A 1973.

Interest-Free Banking in Pakistan ( 1981)