Professional Documents
Culture Documents
Islamic Economy: Objectives
Islamic Economy: Objectives
Economic impact
(a) Riba increases the price level.
(b) Riba decreases the demand for goods.
(c) Riba creates deficit of capital.
(d) Riba is against the efficient distribution of capital.
(e) Riba diverts investment into speculative sector.
(f) Riba creates idleness among the savers.
(g) Riba creates monopolistic opportunity for the capitalist.
(h) Riba concentrates wealth in the few hands through public finance.
(i) Riba encourages artificial crisis in financial sector.
(j) Riba increases unemployment & exploitation of labor.
Bai-Murabaha Bai-Murabaha comes from a combination of two Arabic words: Bai
& Ribhum. Bai means purchase & sale, while Ribhum means
agreed upon profit. So, Bai-Murabaha means sale on agreed upon
profit. It is a mode of investment based on Islamic Shariah
principle under which Bank purchases goods as per terms of
contract with the client from the market (not from the client or his
sister/allied concern), takes the possession of the goods as pledge
in the godown of the Bank or godown of the client under Bank’s
control duly insured and sale these to the client partly or wholly in
cash after fixing price with profit & other expenditures.
Investment Assessment KYC
Amount & types of loans proposed
(KAM-BIPASHA-LSN)
Mitigating factors
Borrower analysis
Industry analysis
Projected financial performance
Account conduct
Supplier/buyer analysis
Historical financial analysis
Adherence to lending guidelines
Loan structure
Security arrangement
Name lending
Istisna Istisna (Manufacturing Finance) is a process where payments are
made in stages to facilitate step-wise progress in the
manufacturing//processing/construction works.