From the point of view of Islamic Shariah, in order to be justified Islamic ally the banking system has to avoid involvement. Consequently, fiscal intermediation in Islamic banking between the bank and the client takes topographic point as a spouse instead than a debtor-creditor. The fiscal activities of modern conventional Bankss are based on a creditor-debtor relationship between depositors and bank on the one manus and between the borrower and the bank on the other. Interest is regarded by conventional Bankss as the monetary value of recognition reflecting the chance cost of money. As involvement is prohibited in Islam, commercial banking in an Islamic model could non be based on the creditor debitor relationship. The other facet of the theoretical footing of Islamic banking is that the involvement free bank is non risk free. This rule is applicable to two chief factors of production, i.e. labor and capital. Harmonizing to this rule, as no payment is allowed to labor, unless it is applied to work, no wages for capital should be allowed, unless it is exposed to concern hazard. From these two rules of the theoretical footing of Islamic banking, it may be said that Islamic fiscal relationships are of a participatory nature. Based on the theoretical background, concern patterns of Islamic bank.
Conventional banking system is wholly based on involvement. There chief motivation and activities to paying and taking involvement. The conventional banking system do non concern about client concern status, whether is gaining net income or loss. For that ground economic market confronting batch of jobs like rising prices.
By discoursing assorted facets of the IBBL, it is shown in item how interest-free bank maps besides many established conventional Bankss in the state.Although conventional Bankss are rendering fiscal services in Bangladesh for a long period still, the invention of interest-free banking systems, proved its worth in the state ‘s money market, since IBBL started rendering banking services without any involvement in the state ‘s fiscal market in recent old ages. The thesis chiefly consists of two subdivisions. In the first subdivision, an debut of Islamic banking systems and assorted funding manners or techniques used by Islamic Bankss, are discussed.
What Is Islamic Banking System?
Islamic banking has been defined in a figure of ways. The definition of Islamic bank, as approved by the General Secretariat of the OIC, is stated in the undermentioned mode. An Islamic bank is a fiscal establishment whose position, regulations and processs expressly province its committedness to the rule of Islamic Shariah and to the forbiddance of the reception and payment of involvement on any of its operations. Shawki Ismail Shehta sing the construct from the position of an Islamic economic system and the prospective function to be played by an Islamic bank therein opines: It is, hence, natural and, so, jussive mood for an Islamic bank to integrate in its maps and patterns commercial investing and societal activities, as an establishment designed to advance the civilised mission of an Islamic economic system ( Ibid ) .
Islamic Banking is a signifier of modern banking based on Islamic legal constructs ( Shari’a ) developed in the first centuries of Islam, utilizing risk-sharing as its chief method, and excepting funding based on a fixed, pre-determined return.
Muslim Banking believes in sharing net incomes and hazards in the concern alternatively of going creditors. In Islamic Banking the depositor, the Bank and the borrower all portion the hazards and wagess of funding concern ventures. This is unlike the interest-based commercial banking system, where all the force per unit area is on the borrower ; he must pay back his loan, with the in agreement involvement, irrespective of the success or failure of his venture. Islam encourages investing in order that the community may profit.
Why Islamic Banking System:
Interest, Usury, or Riba is forbidden in about all major faiths of the universe e.g.
Hebraism
Christian religion
Muslimism
Judeo Christian Tradition
“In thee have they taken gifts to cast blood ; thou hast taken vigorish and addition, and though hast greedily gained of thy neighbors by extortion, and hast bury me, said the Lord God.” [ Ezekiel 22:12 ]
The word used by the Quran refering ‘interest ‘ is Riba. The actual significances of Riba are money addition, addition of anything or increase of anything from its original sum ( Maududi 1979, p.84 ) . However, all additions are non considered as Riba in Islam. Money may increase in concern activities every bit good. This addition is non at wholly considered as Riba. The addition, alternatively of being prohibited ( Haram ) , is approved ( Halal ) in Islam. Islam prohibits merely those additions that are charged on the loan in prefixed rate.
- The Quran
- The Sunnah
Riba In The Koran
That which you give as involvement to increase the people ‘s wealth increases non with God ; but that which you give in charity, seeking the good will of God, multiples manifold. ( The Rome – Sura al-Rum 30:39 )
And for their pickings involvement even though it was forbidden for them and their unlawful appropriation of other peoples ‘ belongings. We have prepared for those among them who reject faith a dangerous penalty ( Woman – Sura Al-Nisa ‘ 4:161 )
“O Believer, take non doubled and redoubled involvement [ involvement on involvement ] , and fear God so that you may thrive. Fear the fire which has been prepared for those who reject religion, and obey God and the Prophet so that you may have mercy” ( The household of Imran – Sura Al-Imran )
“Those who benefit from involvement shall be raised like those who have been driven to madness by the touch of Satan ; this is merely BECAUSE THEY SAY: “Trade is like interest” while God has permitted trade and out involvement. Hence, those who have received the warning from their Lord and desist, may maintain their old additions, their instance being entrusted to God ‘ but those who revert shall be dwellers of fire and abide therein forever” ( The Cow – Sura Al-Baqara 2:275 ) “ … God has permitted trade and out involvement… ” ( The Cow – Sura Al-Baqara 2:275 )
Riba in Hadith
The Prophet cursed:
The receiving system and the remunerator of involvement, the 1 who records it and the two informants to the dealing and said: “They are all likewise ( in guilt ) .” ( Beginnings: Jabir ibn Abdullah, Muslim, Tirmidhi, Musnad Ahmed )
“A dirham of riba which a adult male receives wittingly is worse than perpetrating adultery 30 six times.” ( Beginnings: Abdallah ibn Hanzalah. Mishkat al-Masabih.Bayqahi )
The Prophet said: “Riba has seventy sections, the least serious being tantamount to a adult male perpetrating criminal conversation with his ain mother.” ( Beginnings: Aby Hurayrah, Ibn Majah )
The Holy Prophet said: “Even when involvement is much, it is bound to stop up in paltriness.” ( Beginnings: Ibn Mas`ud, Ibn Majah, Musnad Ahmad )
1.2 Objective of the study
In this study, I have attempted to give on overview of Islamic Bank Bangladesh Limited in general. Besides in the major portion, I have shown the practical attack of General Banking, Investment & A ; Foreign Exchange. Some undermentioned aims of the study are as shown.
- To detect the economic status.
- To explicate the general banking activities.
- To explicate the investing policy.
- To explicate the activities of foreign exchange.
- To place the jobs of IBBL predominating in its banking system
- To propose some possible recommendations to get the better of the jobs.
- To carry on involvement free banking.
- To set up participatory banking alternatively of banking on debitor creditor relationship.
- To put through different manners permitted under Islamic Shariah.
- To accept sedimentations on profit-Risk sharing footing.
- To set up a welfare-oriented banking system.
- To widen co-operation to the hapless, the helpless and the low-income group for their economic upheaval.
- To pay a critical function in human development and employment coevals.
- To lend towards balanced growing and development of the state through investing operations peculiarly in the less developed country.
- To lend in accomplishing the ultimate end of Islamic economic system.
- To carry on Interest Free Banking.
- To accept sedimentations on Mudaraba & A ; Al-Wadeah footing.
1.5 Importance of the survey
Muslim Banking operations in the state. All the government-approved securities in Bangladesh are involvement bearing. Besides, Islamic Money Market in Bangladesh is yet to develop. As a consequence the Islamic Bankss, which are committed to avoid involvement, can non put the allowable portion of their Statutory Liquidity Reserve and Short Term Liquidity in those securities.
Inspire of the present restrictions, Islamic-banking system has enormous potency and chance in Bangladesh. First, the successful launching and needs to an Islamic Money Market in the state. To accomplish practical cognition of banking side of IBBL.
- To detect inter-related activities of general banking of IBBL.
- To derive practical cognition about over all banking system & A ; particularly general banking investing and foreign exchange.
1.6 Restriction
Aim of the practical orientation plan is to hold practical exposure for the pupils. My term of office was for 11 hebdomads merely, which was someway non sufficient. After working whole twenty-four hours in the office it was really much hard, it non impossible to analyze once more the theoretical facets of banking. On the other manus to fix my internship study I have faced some restrictions as follows.
- To roll up informations and information, It is a common inclination of any sections to maintain back their departmental informations and information.
- Inaccessibility to necessitate published paperss.
- Lack of my experience and efficiency to fix the standard study.
- I observed that unskilled individuals are available in IBBL ; they are non able to learn us assorted facets.
