The concept of a workplace pension is nothing new.
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|Career | Bank Islam Malaysia Berhad||Determi… Islamic Equity Investments: Abstract Prior to the coming into existence of Islamic finance, Islamic equity fund investment was almost non-existent in Malaysia.|
|The reference for professionals and students of finance||Principles[ edit ] To be consistent with the principles of Islamic law Shariah and guided by Islamic economics, the contemporary movement of Islamic banking and finance prohibits a variety of activities:|
|Top stories||Search on these Authors Prior to the coming into existence of Islamic finance, Islamic equity fund investment was almost non-existent in Malaysia. With the passage of enabling legislation inawareness and acceptance of Islamic finance as a competitive alternative to conventional finance emerged, as did interest in Islamic equity funds IEFs — albeit very subdued compared to its conventional counterpart.|
I had this conversation recently until the wee hours of morning, and although I never thought a lot about it, I have come to the conclusion that there cannot be an exact replica of the Risk Management in the conventional sense. Risk Management is a tool used by all conventional banking institution in the name of good governance, risk mitigation and prudent practice.
It looks at financial exposures and its inherent risks to the business, and deeply believe in the risk-rewards pay-off within the generally accepted risk appetite of the organisation. To a large extend, the risk management framework employed by the conventional banking businesses can be easily adapted by Islamic Banking counterparts.
The components are the same, and there is little argument on its applicability under Shariah law. It cannot just be seen as a replica of the conventional business; the foundation of Islamic Banking is definitely different. There are a few divergence in the reason an Islamic Banking institutions should ideally follow.
This is an on-going argument on the fact while Islamic Banking claims to be a different business model, but it is still engineered by the rules of a conventional organisation.
But what are these divergent reasons for setting up an Islamic Banking business? The lending of money to make money is forbidden.
This may seem like a trivial thing for Islamic Banking as many will say there is no difference between profit and interest. But for us practitioners, there is a big difference in its concept.
Because of this difference, the way we think about how a product can be structured is paramount. To validate a transaction, all tenets and requirements in an Islamic contracts must be met or else it becomes an invalid transaction and any gains from it must be given to charity.
There are specific Shariah requirements that takes Islamic Banking beyond banking. Traditional banks struggle to understand issues of ownership of assets, risk and loss sharing, purchases of commodity and rental of assets. These activities are beyond traditional banking, and may become an operational risk issue if it is not fully embraced.
Islamic Banking should be more closer to a venture-capitalist, crowd-funding model than traditional banking. The fundamental requirements for earning a profit and to a bigger extent, how much we can earn from a transaction is the element of risk sharing, which mean both customer and financier takes some form of the risks of the venture.
The amount of risk taken under an Islamic contract can be higher for contracts such as Mudharabah or Musyaraka financing but it must be reflective of the economic reality and available assets. The risk assessment of an Islamic contract must then be enhanced to behave similarly to what a venture capitalist can accept.
There will be direct risks on equity, investments and returns. There will be corresponding returns as well. But such concepts will be difficult to digest if the bank is set up based on traditional banking fundamentals, which caters for a totally different profile of stakeholders.
As far as possible, the Shariah committee draws a line for transparency, fairness, and justice. Islamic Banking should be an extended but integral part of economics. Islamic Banking is supposed to be more than a bank.
It shoulders a broader responsibility to the people by looking at needs and providing products that serve a purpose. The idea of responsible financing, transparency and customer service should be the by-word of an Islamic Bank.
Corporate Social Responsibilities also play a role. In this repect, the Shariah committee plays an important role as gatekeepers to the products and services on offer. Because of the unfamiliar territory of Islamic products, Shariah insists that transparency is critical to avoid uncertainty ghararthe terms to the products are fair and the banks are ethical in its conduct to ensure justice.
Fees and charges must reflect actual costs. Efforts are made to help a customer in distress. And conduct of the bank must comply with the requirements of Shariah. Wherever the opportunity arises, the Bank must be able to quickly pass the risk of the asset or valuation to the customer.
Such understanding is also apparent in Islamic Banks. Looking at most Islamic Banking contracts, their structure allows for the transfer of risks, which follows the transfers of ownership, responsibilities and obligations from one party to the other.
The regular types of contracts that continues to share risks are Mudarabah, Musyarakah and Ijarah.JSTOR is a digital library of academic journals, books, and primary sources. Project finance is the long-term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of its sponsors.
Usually, a project financing structure involves a number of equity investors, known as 'sponsors', a 'syndicate' of banks or other lending institutions that provide .
THE ONE-STOP SHARIAH ADVISORY PAGE OF BANK NEGARA MALAYSIA. Finally it is here, the website dedicated to the works and reference regarding the Shariah Advisory Council (SAC) of Bank Negara alphabetnyc.com is a wealth of information on the decisions and fatwa of the SAC, and this will provide valuable reference point on how a particular decision is made.
The average of liquidity risk in banks is ; the average of credit risk is , the average of income diversity is , the average of size is %, and the ROA is %. broad risk-return principles of modern portfolio theory apply).
This study is important for several reasons: (1) it is useful to provide the Muslim community and investment managers with. The Determinants of Commercial Banks’ Lending Behaviour - This chapter is a review of literature as presented by various authors and scholars pertaining to the objectives of the study.