The activity of Islamic banking system
Курсовой проект - Банковское дело
Другие курсовые по предмету Банковское дело
onsultancy services to assist its own staff in project preparation and follow-up; it encourages the establishment of a Federation of Consultants from Islamic countries, and provides continuous support for the Federations activities. Furthermore, the main window for providing funds to the private sector is the extension of lines of finance to National Development Financial Institutions (NDFIs) in member countries. This mechanism helps aims at assisting development in small and medium scale enterprises. Lines are utilized through equity participation, leasing and installment sale operations. New procedures have even been added to provide greater flexibility and incentives for the effective utilization of IDB lines by introducing free limits; higher remuneration for national development banks; two levels of upper and lower limits for financing sub-projects, depending on the nature of the national development bank; and shortening the period for processing sub-projects.has been successful in applying Islamic principles in the field of finance despite the fact that the benefits to the poorer Islamic countries have been limited. It plays a central role in the development of the Islamic financial sector globally through co-operations with central banks; with national development banks and financial institutions and with regional and international financial agencies. In fact, Regular meetings are held between the Governors of central banks and the representatives of OIC member countries to discuss ways and means of improving co-operation among the financial institutions of member countries. The IDB also expands co-operation with the national development banks of the member countries to grant lines of equity, lines of leasing and lines of installment sales to these banks so that they can advance finance to viable local projects. This provides the banks with hard currency and facilitates financing operations for the IDB. And the bank helps to promote a greater flow of resources to its member countries from other financial agencies, through its co-financing arrangements with regional and international financial institutions such as the OPEC Fund, the BADEA and the Arab Fund for Economic Aid and Social Development. [17]
Future challenges for Islamic banking and finance in the Republic of Kazakhstan
Based on the analysis of individual Islamic countries can be made a conclusion that the most optimal for borrowing and the introduction of Islamic system in Kazakhstan is an Iranian one. While in Russia and other CIS countries made attempts to open Islamic banks, Kazakhstan is the first among the post-soviet countries that introduced Islamic financing at the legislative level. On February 12, 2009 President of Kazakhstan Nursultan Nazarbayev signed the Law of RK "О внесении изменений и дополнений в некоторые законодательные акты Республики Казахстан по вопросам организации и деятельности исламских банков и исламского финансирования". The Act was amended a number of significant changes and additions to some legislative acts of the country (the Civil Code, Tax Code, the laws "On securities market" and "On Banks and Banking Activity in the Republic of Kazakhstan", "On state registration of immovable property and transactions with him, "" On Obligatory guarantee deposits placed in banks of the Republic of Kazakhstan "," On Investment Funds ", etc.). , despite all its advantages and all the progressive potential, the Act of February 12, 2009 did not meet all the requirements necessary for successful implementation and development of Islamic finance in our country. For example, experts believe that the Islamic financial services in Kazakhstan are not massive, but rather a "niche" product. Consequently, due to limited customer base will be more effective implementation of these products through so-called Islamic "windows" in the framework of the commercial bank. In accordance with the law or to create Islamic "windows", that is to work with Islamic financial instruments could only new bank set up according to Islamic principles. After some time it will be necessarily to be amended for the optimization of the law. And it may be necessary to amend the legislation to permit the opening of the Islamic "windows". For example, in January 2010, Kazakhstan has opened its first Islamic bank Al-Hilal. In 2009, created several non-bank financial institutions: brokerage company JSC Fattah Finance, Consulting LLP Kausar Consulting Kazakhstan, LLC Akyl-Kenes Consulting" Ltd. Islamic Financial Instruments, an investment fund AIFRI "Amana Islamic Foundation "Allied Insurance Company" Halal insurance "Takaful". Also was created non-profit organizations related to Islamic finance: Association of Legal Entities "Association of Islamic finance," the Islamic Center of funding, training, and business in Almaty, the Club for the development and promotion of Islamic insurance in Kazakhstan. [18]
CONCLUSION
Islamic banking and finance had its major beginnings in the year 1975 with the establishment of the Islamic Development Bank. Islamic banking has flourished in various countries since then with Malaysia, Indonesia, UAE, Pakistan and Saudi Arabia being in the forefront. Islamic banking has also recently done rather well in non-Muslim countries with the reported size of UK Islamic banking overtaking that of majority Muslim countries like Pakistan. Islamic banking assets are thought to be anywhere from 700 billion dollars to 900 billion dollars as of 2009. The credit crunch that has affected much of the western world has not taken its toll on the Islamic Banks, mainly because of the nature of the underlying transactions which admonish Riba and encourage instead a partnership based approach. The result is that the actual profit or loss is shared with the shareholders rather than an arbitrary number called Riba or interest which they have to come up with to please the investors regardless of the market situation. In this way, Islamic Banking also helps in depicting the true state of the economy.preceding discussion makes it clear that Islamic banking is not a negligible or merely temporary phenomenon. Islamic banks are here to stay and there are signs that they will continue to grow and expand. Even if one does not subscribe to the Islamic injunction against the institution of interest, one may find in Islamic banking some innovative ideas which could add more variety to the existing financial network.of the main selling points of Islamic banking, at least in theory, is that, unlike conventional banking, it is concerned about the viability of the project and the profitability of the operation but not the size of the collateral. Good projects which might be turned down by conventional banks for lack of collateral would be financed by Islamic banks on a profit-sharing basis. It is especially in this sense that Islamic banks can play a catalytic role in stimulating economic development. In many developing countries, of course, development banks are supposed to perform this function. Islamic banks are expected to be more enterprising than their conventional counterparts. In practice, however, Islamic banks have been concentrating on short-term trade finance which is the least risky.of the explanation is that long-term financing requires expertise which is not always available. Another reason is that there are no backup institutional structures such as secondary capital markets for Islamic financial instruments. It is possible also that the tendency to concentrate on short-term financing reflects the early years of operation: it is easier to administer, less risky, and the returns are quicker. The banks may learn to pay more attention to equity financing as they grow older.is sometimes suggested that Islamic banks are rather complacent. They tend to behave as though they had a captive market in the Muslim masses that will come to them on religious grounds. This complacency seems more pronounced in countries with only one Islamic bank. Many Muslims find it more convenient to deal with conventional banks and have no qualms about shifting their deposits between Islamic banks and conventional ones depending on which bank offers a better return. This might suggest a case for more Islamic banks in those countries as it would force the banks to be more innovative and competitive. Another solution would be to allow the conventional banks to undertake equity financing and/or to operate Islamic counters or windows, subject to strict compliance with the Shariah rules. is perhaps not too wild a proposition to suggest that there is a need for specialized Islamic financial institutions such as mudarababanks, murabaha banks and musharaka banks which would compete with one another to provide the best possible services.
REFERENCES
1. Abdallah, A., 1987. Islamic banking, Journal of Islamic Banking and Finance, January March, 4(1): 3156.
. Bruce, N.C., 1986. Islamic banking moves east, Euromoney, July: 1425.
. Karsten, I., 1982. Islam and financial intermediation, IMF Staff Papers, March, 29(1):10842.
. Errico, Luca, and Mitra Farrahbaksh, 1998, Islamic Banking: Issues in Prudential Regulation and Supervision, IMF Working Paper 98/30 (Washington: International Monetary Fund).
. Iqbal, Zubair and Abbas Mirakhor, l987, Islamic Banking, International Monetary Fund Occasional Paper 49 (Washington: International Monetary Fund).