There are some issues regarding deposit that occur. As we know the main function of the financial intermediaries like banks are the safe keeping the money or property. Therefore, in order for them to make sure our money save, they need to do something to gain a return or profit from it and it is the basic things in this world. In Islamic concept, there are two kind of deposit; which are Wadiah yad dhamanah and Wadiah yad amanah. The modus operandi for both wadiah has been discussed before. Then, in the deposit there are two based which is qard based deposit and mudharabah based deposit. The issues itself occur when some of the system is contradict with shariah principle that will be discuss later.
1. Qard based Deposit
a) Excess for the Lender
In a loan contract, any excess for the lender whether the excess in terms of quality, quantity, tangible things, benefit is deemed prohibited as this may amount to riba. Therefore, what is the basis for allowing the account holders to utilize the ATM card and the cheque book without any form of compensation? This can be an excess for the lender and may amount riba. According to the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) Shariah Standard for this form of utilization is permissible in Shariah. This is because the benefits that arise out of this common to both parties as both will benefit from this issue. This will then set-off the benefits of both parties against each other and the issue of riba will then not arise.
b) Hibah (Gift)
It is not allowed for the banks to provide qard-based deposit account holders’ material gifts, financial inducements or benefits that are not related to the deposits and withdrawals. However, the banks may put at their ow...
... middle of paper ...
...side. Also we discuss about theoretical basis and contemporary application. Then, continue with the similarities and the differences of both deposits. The similarities of both deposits can be seen from the features of types of deposit. In the other hand, the differences is still clearly can be recognize when the Islamic deposits in based in line with Shariah while the conventional deposits based on human law. And lastly the issue that had been arises about deposit in Malaysia.
For the conclusion, in our opinion Islamic deposit will be given more benefit to the depositors. Although the Islamic deposit is to be said more likely to conventional deposit, but still there are absolute differences that we can see from both deposit where the Islamic deposit is more better because it is free from the element that will be harm the society which are riba, maisir and gharar.
Despite their protective and righteous purport, TBTF regime has become a significant public matter in question. Trials of effort to justify TBTF did not turn out so convincing partially because its definition has not yet been fixed. In other words, there is no set standard of “who” precisely is being bailed out and who is not, under “what” circumstances. Beyond the bound of possibility to avoid all insolvency losses of the bank, it is inevitable to make decisions to protect the chosen but not all depositors. This decision primarily relies ...
Banking supervision regards two major points which are safety and soundness. This has to do with consumer protection laws, safety and soundness of a bank often gets measured by an examiner. The examiner has to perform an examination review on banks performances which is based off the banks management, financial condition, and its commands with regulations. This helps protect consumer’s rights towards consumer’s protection laws, also helps ensure consumers they are safe with their banks.
It’s mandatory for all the banks to deposit a certain determined percentage of their assets with the central bank to make sure that the banks’ customer deposits are safe. These percentages are what the central bank adjusts to reduce or increase the banking lending ...
If you are like most consumers, you have noticed the huge amount of fees banks are charging lately. We as consumers are overloaded with fees. We are charged for ATM withdrawals, overdraft fees, and statement fees. Sometimes of these fees are our fault; we might enjoy convenience, but we may not give enough considerations to the cost. You might be fed up with these fees, and looking for ways to stop paying those fees. You can achieve this for with minor modification.
The modern Islamic Finance industry is young, its timeline begin only a few decades ago. However, islamic finance is involving rapidly and continues to expend to serve a growing population of muslims as well as conventional.
This paper would analyze the different types of bank guarantee, i.e., conditional and unconditional bank guarantee and would also highlight the differences between general guarantee as defined under Section 126 of the Indian Contract Act, 1872 and a bank guarantee. It would also delve into the discussion about the conditions under which the courts would grant injunctions restraining a bank from enforcing a bank guarantee. Alongside, this paper would also bring to light the significant difference between the Indian law and the common law in relation to the way they deal with injunction of bank guarantee.
This system helps all of these banks provide financial secrecy which is that only you and your banker would legally be allowed to know the financial activity within your account. The financial secrecy, completely different from financial privacy, includes many regulations to maintain this asset of secrecy. For example, many banks would n...
At Peoples’ Bank, “massive changes began to take place in the business environment of banking with deregulation and the relaxation of ceilings on interest”. This affected what people actually did with their money and where they actually put their money; and these two factors affected the whole money market system of banking. This especially affected the competition between the different levels of banks (regional, district, and local) for various (but the same) sources of funds.
On the one hand, people live in advance economic country will get a high income. When people get more disposable income, which is total income minus consumer on foods and life essential goods, people will deposit excess money into his bank account, and the amount of money is higher than people in developing country, because people live in developing country will have less sensitivity to save money, and the economic environment in developing country is more variable. On the other hand, there are two situations, first is the income for one person only could afford his life essential goods, so this person will not deposit money into bank account. Second is a person who has exceeding income, but this person may not have basic finance literacy, because he is lack of finance education, so he will not choose to save money, just because he do not know the finance activity. Therefore, the savings in developed country will higher than savings in developing country, as the result of, bête and saving and uncertainty higher than developed
First of all, let us outline how Islamic banks actually work and what their main differences are in comparison with conventional banks. In this banking system, banks are operated by Islamic laws (known as Sharia), so Islamic economic principles are considered as primary guidance. Two basic doctrines behind Islamic banking are the sharing of profit and loss and, significantly, the prohibition of the collection and payment of interest . Hence unlike conventional commercial banks, Islamic banks do not pay or charge interest on lending or borrowing of money. This is because the Sharia’s strictly prohibits, among other things, the receipt and payment of riba (interest) /. The interpretations to clarify the meaning behind this restriction suggests that earning or charging extra amount of money from debtor has to be seen something as immoral behavior, because making pressure on your borrower is actually unfair from the view point of Islam. To make it clear, the religion of Islam basically promote the principle of justic...
Communication modern technological tools that have been enhanced by Information Technology are having an impact on changing the very structure and communication of banking. That is, clients are enabled to make their banking transactions whenever and wherever they want. Bank clients, by just logging on their online account, can transfer any amount of money from their account to any other account, check their last processed banking transactions and apply for loans and other banking services. According to Keyes ( 2000, p.591) 'electronic checks provide consumers with the benefits of convenience and safety while allowing billers to maintain their existing depository relationships with their banks'. Further, e-mails has enabled bank employees to notify their customers of any new enhanced bankin...
According to Shari’ah, which is the guidelines underlined by Islam, there is several principles of Islamic Banking that are in accordance to its practices. They are :-
The study is primarily designed to find out the continuous issue of the banking system in
Clearing of bank mechanism include collection and payments of cheque, demand draft, payment regulate and dividend warrant etc. it’s a best service offer by the bank. It helps the customers a lot necessary role of commercial bank is to accept deposit and to honor cheque drawn upon them. Typically cheques are used for the payment making to account holder. Collection and payments of instrument are known as outward and inward clearing. During my training in clearing department Mr. Usman help me to improve my learning.
5. Presence of central bank: The Reserve Bank of India has been vested with wide powers of control over different institutions in the money market. The indigenous banking has, however, remained outside the sphere of RBI’s direct control. The rates of interest in the unorganized sector are, therefore, substantially higher than those in the organized sector. The Central Bank controls money supply of the country as per needs of the economy. The other member banks can borrow from The Central Bank during emergency. Thus, a powerful Central Bank controls, regulates and guides the money