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    Presentation Makbul

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    vivekananda Roy
    The document discusses three main mechanisms that Islamic banks use to deploy investable funds: 1) Bai-Mechanism includes various sale contracts like murabaha, salam, and istisna that allow banks to earn profits. 2) Sharing Mechanism includes mudaraba and musharaka contracts that are types of partnership with profit-sharing. 3) Ijara Mechanism includes leasing contracts like ijarah and various hire-purchase options that allow banks to generate income through asset ownership and rental fees.

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    Presentation Makbul

    Uploaded by

    vivekananda Roy
    40 views4 pages
    The document discusses three main mechanisms that Islamic banks use to deploy investable funds: 1) Bai-Mechanism includes various sale contracts like murabaha, salam, and istisna that allow banks to earn profits. 2) Sharing Mechanism includes mudaraba and musharaka contracts that are types of partnership with profit-sharing. 3) Ijara Mechanism includes leasing contracts like ijarah and various hire-purchase options that allow banks to generate income through asset ownership and rental fees.

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    Presentation_Makbul

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    The document discusses three main mechanisms that Islamic banks use to deploy investable funds: 1) Bai-Mechanism includes various sale contracts like murabaha, salam, and istisna that allow banks to earn profits. 2) Sharing Mechanism includes mudaraba and musharaka contracts that are types of partnership with profit-sharing. 3) Ijara Mechanism includes leasing contracts like ijarah and various hire-purchase options that allow banks to generate income through asset ownership and rental fees.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    40 views4 pages

    Presentation Makbul

    Uploaded by

    vivekananda Roy
    The document discusses three main mechanisms that Islamic banks use to deploy investable funds: 1) Bai-Mechanism includes various sale contracts like murabaha, salam, and istisna that allow banks to earn profits. 2) Sharing Mechanism includes mudaraba and musharaka contracts that are types of partnership with profit-sharing. 3) Ijara Mechanism includes leasing contracts like ijarah and various hire-purchase options that allow banks to generate income through asset ownership and rental fees.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 4

    Mechanism of Bai-Mechanism:

    Investment · Bai-Muarabaha
    · Bai-Muazzal
    · Bai-Salam
    Islamic Banks to deploy · Bai-Istisna
    their investable funds · Bai-As-Sarf
    through use three Sharing Mechanism:
    mechanisms: · Mudaraba
     Bai-Mechanism · Musharaka
    Ijara Mechanism:
     Sharing Mechanism
    · Ijarah
     Ijara Mechanism · Hire-Purchase/Ijara Wa-Iqtina/Ijara Muntahia Bittamleek
    · Hire Purchase under Shirkatul Meelk(HPSM)/Hire
    Purchase Musharaka Mutanaqasa (HPMM)
    · Leasing

    Advance Training Program on Shariah Banking conducted by SBAC Bank Training


    Institute
    Bai -Mechanism

     It is sale contact at a mark-up profit.


     Cost and added profit must be disclosed separately.
    Bai-Murabaha  It is a part of Muamalat and it would be permitted if it is not
    exclusively prohibited.

    Bai -Muazzal · It is known as deferred Murabaha, which sale on credit.


    · Cost and added profit may not be disclosed to customer.
     It means advance purchase.
     In Bai-Salam, the price is paid in advance, but the delivery of
    Bai-Salam the goods is deferred.
     Generally, it is used to purchase agricultural goods to be
    produced in future.

    Essential Conditions for the Contracts of Murabaha, Bai-Muazzal and Salam:


    *Number/Quantity *Date of Supply
    *Quality *Place of Supply
    *Sample *Who will bear the cost of Supply
    *Price & amount of Profit *Timeframe for payment (Incase of Murabaha & Bai-Muazzal)

    Advance Training Program on Shariah Banking conducted by SBAC Bank Training


    Institute
    Bai -Mechanism
     It is derived from the Arabic ward `SANA’ that means
    manufacturing.
    Bai-Istisna  It is an order of sale.
     Price is known by both parties at the time of contract.

    · It is a contract of exchange of money for money.


    Bai-As-Sarf · Pre-conditions of Bai-As-Sarf:
    a) Must be hand to hand i,e. on spot basis
    b) Contract must be unconditional
    c) It should not be speculative

    Sharing Mechanism
    Mudaraba: Musharaka:
    · It is a type of partnership contract where · It is a type of partnership contract where
    ‘Shahib-al--Mal’ provides funds & both parties are involved in management of
    Mudarib manages the business. the business, but not mandatory.
    · Profit is shared on the basis of pre-agreed · Profit is shared on the basis of pre-agreed
    ratio . ratio .
    · Loss is borne by Shahib-al—Mal. · Loss is shared in the ratio of capital
    contribution.

    Advance Training Program on Shariah Banking conducted by SBAC Bank Training


    Institute
    Ijara Mechanism
     It is contract where the owner of an asset with value transfers its
    usufruct to another party for a specific period in exchange of an
    agreed consideration.
    Ijarah  Ijarah the owner of the asset charges some prices for the use of it by
    others.
     At the end of the leased period, the asset may be sold to the client at
    an agreed price.

    · Under this mode, the bank purchases vehicles, machineries and


    Hire-Purchase/ instruments, building, apartment etc. and allowed clients to use
    Ijarah Muntahia those on payment of fixed rents in installments with the ultimate
    objective to sell the asset to the client at the end of the rental period.
    Bittamlik
    · The client acquires the ownership/ title of the assets/ properties
    subject to full payment/ adjustment of all the installments.

    · It means purchasing and acquiring ownership by one party by


    sharing in equity and paying rents for the rest of the equity held by
    Hire -Purchase the Bank/or other party.
    under Shirkatul · The client uses the portion of the assets owned by the bank on
    Melk (HPSM) rental basis and acquires the ownership of the same assets in
    installments as agreed upon.

    Advance Training Program on Shariah Banking conducted by SBAC Bank Training


    Institute

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