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Islamic banking

1. Mudaraba - financing on the ground of belief

  The essence of this mechanism consists of presentation the capital by one side (depositor) and its investment into business by another (manager).
  Profit is distributed between depositor and manager according to agreed share division. In case of unsuccessful result the depositor recognizes the loss (assumes the loss), the manager gains nothing from the agreement. That's why the last is interested more in successful conclusion of the business. At the same time he has the power to choose the directions of investments except those prohibited by Islam.
  Bank can act either as a client (in case of financing any project) or as a trusted (confidence) manager (in case of work with capital of depositors). In the first case a part of income should form the profit of the bank and with its help the profits of depositors invested their capital to the bank depository according to Mudaraba system.
  Depositors trust their capital to Islam Bank for investment in different operations and projects. Naturally, the Bank is more competent to define the effectiveness and economic benefit of these operations and projects with help of its experts.
  As it is mentioned, the bank and the depositor get the profit in case of successful result of operation. The possibility of loss for the objective reasons that does not depend on bank is approved in the agreement between the bank and operator. If the bank doesn't present with its capital in financing then its capital doesn't undergo any risk not considering gained profit. The depositor has the right to investigate the reasons of unsuccessful project in judicial form. If it is proved that the reason of unsuccessful operation is bank's careless, non-competentness of professionals, bad management, then bank has the whole financial responsibility against the suffering side.

2. Musharaka - companionship, joint realization of the project by bank and
owner.

  All the participants of the project act as business partners. Profits and the loss are divided among partners according to agreement obligations depended on their capital investments. All details of project including type of the business, conditions, terms, reductions, obligations, schedule for division of income and loss, etc. are approved in the agreement.
  In the agreement both sides can accept the same capital investment with equal rights and obligations, the same profits and loss. In other version partners make investments with different value; the profits and loss are divided among them.

3. Murabaha - financing of commercial operations.

  Bank finances the commercial operation and gets the profit approved in the agreement. For example, bank byes goods on its account for client's offer. In this case bank is responsible for all risks dealing with commercial operation. Afterwards, bank sells goods to the client with the price considering commercial additions of agreement.
  This commercial addition forms the profit of the bank. The customer as a rule returns it with delay.

6. Zakat - compulsory tax.

  Bank creates the Zakat House for gathering zakat - the 2,5 % of the obligatory tax that rich Moslems should pay from their property according to Koran. Zakat is aimed for needs of the poor Moslems, projects for improvement of their household, social works. Besides obligatory taxes voluntary donations are also included to Zakat House.

7. Kard - al - Hasan - loan bearing no rate

  Bank gives to physical persons or organizations the loan bearing no rate with return in agreed period. The owners who need capital can take necessary amount from Bank's funds. If the person is not in condition to return the credit then the money is given from Zakat fund in non-return form. Bank can fund the loan bearing no rate to government or organizations realizing social projects (construction of plants, factories, roads, objects with vital importance).

                               8. Bayt - al - Mal - state treasury.

One of the sources for the financial income is the taxes paid according to Islamic legislation. Bayt - al - Mal is the fund for compensation of public needs. The means are directed also for social protection of widows, orphans, diseases, the poor level of the people.
The debt of a debtor that is in difficulty or any other debtor can be remitted on account of this fund. This guaranty stimulates the creditors to invest to exact persons.
So, the Islamic Bank offers three kinds of accounts bearing no rates to its clients:

1. Current account: Analogical account with the cheque and savings-bank-book as it is in ordinary banks, naturally without percent stock.
Bank has the right to take service fee from clients for current service of enlisted deposits. Profit is paid to the depositor as compensation in nominal rate in case of increase of inflation in the country.
2. Investment account: As above mentioned, depositor invests means in different operations realized by the bank and shares the profits and losses according to the agreement.
3. Credit account: Short-term and long-term credits are given for needs of depositors and the poor level of people. The rich Moslem acting on behalf of his belief investing means on bank's credit account (in the form of short-term and long-term deposits) pecuniary supports his brothers and sisters of same belief. The bank, in its turn guarantees the return of means to the depositor in agreed time.
The credit - loan and operation activity of the bank naturally is not limited by aforementioned mechanisms. Though this forms the main structure of Islamic finance - credit system and clients, partners execute other bilateral operating forms in this sphere.
Participating in charitable actions banks help the social and economic development of the country they are situated and function in.

 

 

 

Currency rates

18.08.2014
 CBABUYSELL
USD0.78420.7790.786
EUR1.05051.0441.055
GBP1.3121.31.323
RUR0.02170.02110.0219

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