Advantages And Disadvantages Of Islamic Banking In Malaysia

As we know there are a lot of services that offer by Hong Leong Islamic Bank such as home financing and car financing. The services that offer are difference is it according to Shariah principles of Islam in the transactions, most important difference become give and accept interest or usury which prohibited solely. As a customer, we have right to choose bank’s services that give us benefit and right according to our thought. For Muslim, we must follow Shariah in our daily life activity because it

In general, there are scholarly agreements in certain aspects relating to bay al-urbun, but in the same time, there is a form of disagreement among them from another perspectives. The scholars agree that bay al-urbun is necessary if the seller returns the deposited money by the buyer if the business deal is canceled by the buyer, as stated by Imam Malik (Al-Dasuqi 1980: p 63) .Even thisconcept applies, the objectives of the al-urbun contract still cannot be achieved. Then, there will be no disagreements among the 'ulama’ if both parties continue the businessdeal andthe money which has been deposited at the beginning is calculated as the sum of the price that the purchaser needs to pay.

Lastly, looking in to another lending product of Bank of Maldives, BML Home Construction Loan can be obtained by Maldivians who are in between 18 to 60 years, for the purpose of constructing residential houses, raw houses and flats, guest houses, condominiums and office premises. With an interest percentage of base rate + 2.50% (Current base rate is 9%) per annum Home Construction Loans are provided for the eligible customers with 15 years (180 months) as the maximum tenor period. Bank of Maldives offer a grace period of 12 months for this loan in order to ease the repayment amount of the customers while the project is ongoing. Before starting the project customers have to invest 20% of the loan amount from their own funds. For example, if a customer requests for MVR100,000/- the person needs to invest MVR20,000/- as own contribution. Customer can either invest this amount to the project or keep it as an amount to be invested in the customer’s account in Bank of Maldives. Moreover, in Home Construction Loan the building needs to be mortgaged by the bank and the collateral cover should be more than or equal to 150% upon completion of the building. Unlike, Vessel Financing Loan this loan is disbursed in phases. For instance, if a customer requests MVR100,000/- the initial disbursement provided by

Must clearly specify parties that are subject to the agreement and will be legally bound by the contract. The bank and its client will exchange contracts throughout

Housing supply in Kathmandu has been taking place almost entirely with private sector initiation and through owner-builder process, financed mainly from personal savings, sale of family assets such as land and jewelry, family loans, and to some extent, provident-fund loans. In addition to the above sources, the financing is also supported by loans from employer institution and bank loans. Family income compared to the price of land and house is quite low. It takes five to ten years, on an average, for low-income families to save to buy a plot of land and then almost as many years more to 20 build a house. It is common to build low- and middle-income housing incrementally.

MAIL (Mate Australian Islamic Loans) is an organisation created with young Australian Muslims in mind. It aims to help young Australians get Islamic compliant home loans and car financing without having to do any complicated research about the rules and regulations that allow loans to be Sharia compliant in Australia – this means that they can be assured that they can borrow the money they need without contravening their religious principles.

“ In simple terms, a bank lends money to someone who wants to buy a house. In return, the house buyer signs a paper called mortgage which says they will pay the bank back and that if they don’t, they will forfeit their house to the bank.

Home loans are a rather simple format in the United States of America which requires an online application first and then based on the salary structure of the applicant, a dividend is decided and various banks offer various formats of investment in the concept of home loans. Everybody dreams of a home that is tax-free and their very own. Though it does ensure a rather long process of evaluation which may or may not include a personal interview of the applicant, it is one of the safest loan structures and resembles the structure of Indian home loan system as well in many ways.

Potential conflict of interest in acting for both parties. It would be difficult to be truly independent in acting for both parties in the transaction. Also as there is no agent managing the sale, the deposit monies paid by the purchaser must be paid into a solicitors or conveyancers trust account or be deposited into a special purpose account in an authorised

Becoming an expert in Islamic economics and finance field is one of my long-term goals in life. I started to organize and made a plan towards achieving that dream since senior high school. The concern towards Islamic economics and finance concept, and its application for society and the country began when I was reading a book entitled Islamic banking-theory and practice. After finishing reading the book, my interest in Islamic economic and finance topics rose and strengthen my own determination to become the expert of Islamic economics and finance. The main principle of Islamic economics and finance which offers the just and ethics in economic activity, poverty alleviation through income distribution mechanism, and prevention of economic and

An Islamic financial institution such as financial banking has been established before two or three decades ago in the aim to provide satisfactory financial facilities to the interested parties as compared to conventional banks. In 1974 Dubai Islamic bank which is the first Islamic commercial bank was established and later Islamic Development Bank (IDB) has been established in 1975 (Hennie and Iqbal, 2008).

Murabaha is an Islamic home financing sale contract. The customer promises to purchase the house from the bank on an agreed mark-up price if the bank purchase the house in Murabaha contract. Besides that, Murabaha sales contract can only execute when the initial price of the house can be determined. In addition, one of the most important mechanisms of Murabaha contract is the cost of the house and profit incurred need to be mentioned clearly and truthfully to the customer.

An ijarah for the most part includes the Islamic budgetary establishment acquiring an advantage as indicated by the client. The money related foundation and the client concede to the terms of the agreement, including the time of the lease and the rental charge of the lease. The Islamic money related establishment holds responsibility for resource while the client procures the privilege to utilize the advantage. In this kind of Islamic account exchange, the client is paying a rental charge for the utilization of a monetary resource as opposed to enthusiasm on an advance.

P roject finance transactions are complex transactions that often require numerous players in interdependent relationships. To illustrate, we provide an organization diagram of the various players seen from the viewpoint of an agent bank in a generic project finance transaction:

With its assets estimated to total nearly $1 trillion globally, Islamic finance remains tiny compared to conventional finance with its tens of trillions of dollars. The market in Islamic bonds, or sukuk, is believed to total about $50 billion, roughly 1 percent of global bond issuance. In view of the financial crises which have been affecting the whole world, a solution in the name of Islamic finance could be introduced. As the global economic slowdown becomes more severe and protracted, many countries will be seeking alternatives, and Islamic finance can seize these new opportunities by offering standardized Islamic finance products with prudent regulations and supervisory arrangements. The beauty of the Islamic finance lies in its balanced and integrated approach towards a development policy that is urgently called for in the current crisis, caused by the awesome importance attached to the promotion of the financial sector alone. Islamic Finance is a viable alternative to conventional finance.