...BWBS3043 ISLAMIC BANKING MANAGEMENT TABLE OF CONTENTS BIL 1.0 2.0 CONTENT Islamic Contracts in Islamic Bank INTRODUCTION OF THE SELECTED BANK 2.1 2.2 2.3 Background of Affin Bank Berhad Background of Islamic Affin Bank Berhad Background of RHB Islamic Bank Berhad PAGE 2 5 5 6 7 8 8 12 15 17 18 47 3.0 LOAN AND FINANCING SERVICES 3.1 3.2 Affin Bank Berhad Services Affin Islamic Bank Berhad Services 3.2.1 3.2.2 3.3 Trade Financings Contracts Financing RHB Islamic Bank Services 4.0 Comparison of Products between Conventional Bank and Islamic Bank 4.1 Affin Bank Berhad and Affin Islamic Bank Berhad 19 20 5.0 References Page | 0 BWBS3043 ISLAMIC BANKING MANAGEMENT 1.0 ISLAMIC CONTRACTS IN ISLAMIC BANK Definition It involves a contract between the seller and its buyer for the sale of goods at a price that includes an agreed profit margin, either a lump sum or percentage of the purchase price. The seller will purchase the goods that requested by buyer and will sell them to buyer with a mark-up. Contracts Murabahah (cost-plus financing) Mudharabah (profit sharing) Contract with one party providing 100 per cent of the capital (Rabb al-Mal) and the one party (the mudharib) providing its expertise to invest the capital and manage the investment project. Profits generated are distributed according to a pre-determined ratio, but it like the capital itself that cannot be guaranteed. The provider of capital was the losses, who have no control over the management of the project...
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...RISK MANAGEMENT IN ISLAMIC BANKING AND FINANCE: THE ARAB FINANCE HOUSE EXAMPLE Bilal A. Fleifel A Thesis Submitted to the University of North Carolina Wilmington in Partial Fulfillment of the Requirements for the Degree of Master of Business Administration Cameron School of Business University of North Carolina Wilmington 2009 Approved By Advisory Committee Howard Rasheed Cetin Ciner William H. Sackley Chair Accepted By DN: cn=Robert D. Roer, o=UNCW, ou=Dean of the Graduate School & Research, email=roer@uncw. edu, c=US Date: 2010.01.21 15:02:51 -05'00' ________________________ Dean, Graduate School TABLE OF CONTENTS TABLE OF CONTENTS ..................................................................................................... ii ABSTRACT........................................................................................................................ vi ACKNOWLEDGMENTS .................................................................................................. vii DEDICATION .................................................................................................................. viii LIST OF TABLES .............................................................................................................. ix LIST OF FIGURES...............................................................................................................x GLOSSARY .............................
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...CHAPTER I: INTRODUCTION 1. THEME OF THE STUDY Risk management underscores the fact that the survival of an organization depends heavily on its capabilities to anticipate and prepare for the change rather than just waiting for the change and react to it. The objective of risk management is not to prohibit or prevent risk taking activity, but to ensure that the risks are consciously taken with full knowledge, purpose and clear understanding so that it can be measured and mitigated. It also prevents an institution from suffering unacceptable loss causing an institution to suffer or materially damage its competitive position. Functions of risk management should actually be bank specific dictated by the size and quality of balance sheet, complexity of functions, technical/ professional manpower and the status of MIS in place in that bank. 1.2 INTRODUCTION Risk: the meaning of ‘Risk’ as per Webster’s comprehensive dictionary is “a chance of encountering harm or loss, hazard, danger” or “to expose to a chance of injury or loss”. Thus, something that has potential to cause harm or loss to one or more planned objectives is called Risk. The word risk is derived from an Italian word “Risicare” which means “To Dare”. It is an expression of danger of an adverse deviation in the actual result from any expected result. Banks for International Settlement (BIS) has defined it as- “Risk is the threat that an event or action will adversely affect an organization’s ability...
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...Literature Review In the globalization or non-globalization of the banking industry, they realized that the quality control management can make an exploration to improve their competitive position and assure the quality of the service had control by them. The study of the research examined the characteristics of a good quality service in the banking industry. The problem want to be investigate and solve is how to use quality and operation management to improve quality service in baking industry. One of the research found out that combine the Six Sigma and Lean management tools become Lean Six Sigma can implement higher quality in service and operations. This tool can help banking industries to improve the abnormality of relevant outputs and...
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...Journal of Money, Investment and Banking ISSN 1450-288X Issue 6 (2008) © EuroJournals Publishing, Inc. 2008 http://www.eurojournals.com/finance.htm Costing the Banking Services: A Management Accounting Approach Jordi Carenys Professor at the Management Control Department. EADA Business School EADA, c/o Aragó 204, 08011 Barcelona, Spain E-mail: jcarenys@eada.edu Tel: 934 520 844; Fax: 933 237 317 Web: www.eada.edu Xavier Sales Professor at the Management Control Department. EADA Business School E-mail: xsales@eada.edu Abstract The present study aims to outline the characteristics of the cost systems used in banking institutions. It does so by describing the partial costs and full cost systems in banking institutions. It then looks at the limitations of these approaches to the current competitive conditions and goes on to consider the applicability of the activity based costing system in the allocation of indirect transformation costs to branches, products and customers. Finally, we will look at the findings of a questionnaire to Spanish savings banks in order to evaluate how widespread these systems are and how they are used in savings banks. We found that direct costs systems predominate in customer and products entries whereas full costs systems are much more widespread in the case of branches. Furthermore, we also found that the use of activity based costs systems is very limited. Keywords: Saving banks Cost structure Management accounting Cost systems Activity based...
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...CHAPTER I: INTRODUCTION 1. THEME OF THE STUDY Risk management underscores the fact that the survival of an organization depends heavily on its capabilities to anticipate and prepare for the change rather than just waiting for the change and react to it. The objective of risk management is not to prohibit or prevent risk taking activity, but to ensure that the risks are consciously taken with full knowledge, purpose and clear understanding so that it can be measured and mitigated. It also prevents an institution from suffering unacceptable loss causing an institution to suffer or materially damage its competitive position. Functions of risk management should actually be bank specific dictated by the size and quality of balance sheet, complexity of functions, technical/ professional manpower and the status of MIS in place in that bank. 1.2 INTRODUCTION Risk: the meaning of ‘Risk’ as per Webster’s comprehensive dictionary is “a chance of encountering harm or loss, hazard, danger” or “to expose to a chance of injury or loss”. Thus, something that has potential to cause harm or loss to one or more planned objectives is called Risk. The word risk is derived from an Italian word “Risicare” which means “To Dare”. It is an expression of danger of an adverse deviation in the actual result from any expected result. Banks for International Settlement (BIS) has defined it as- “Risk is the threat that an event or action will adversely affect an organization’s ability...
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...Risk management in banking sector Table of content Particulars | Page no. | Executive summary | | Introduction | | Literature review | | Research methodology | | Sampling techniques | | Tools of analysis | | Data analysis & findings | | Conclusions | | Scope for further research | | Reference | | Executive Summary Today, The Indian Economy is in the process of becoming a world class economy. The Indian banking industry is making great advancement in terms of quality, quantity, expansion and diversification and is keeping up with the updated technology, ability, stability and thrust of a financial system, where the commercial banks play a very important role, emphasize the very special need of a strong and effective control system with extra concern for the risk involved in the business. Globalization, Liberalization and Privatization have opened up a new methods of Financial transaction where risk level is very high. In banks and financial institutions risk is considered to be the most important factor of earnings. Therefore they have to balance the Relationship between risk and return. In reality we can say that management of financial institution is nothing but a management of risk managing financial risk systematically and professionally becomes an even more important task. Rising global competition, increasing deregulation, introduction of innovative products and delivery channels have pushed risk management to the forefront...
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...robust branch network of scheduled commercial banks, co-operatives and regional rural banks, introduction of mandated priority sector lending targets, lead bank scheme, formation of self-help groups, permitting BCs/BFs to be appointed by banks to provide door step delivery of banking services, zero balance BSBD accounts, etc. The fundamental objective of all these initiatives is to reach the large sections of the hitherto financially excluded Indian population. The speech is organized in five sections: Section 1 - Definitions Section 2 - Extent of Financial Exclusion Section 3 – RBI Policy Initiatives and Progress in Financial Inclusion Section 4 – Stakeholder-wise Issues in Financial Inclusion Section 5 – Conclusion and Way forward Section - 1 Definitions 1.1 Financial inclusion may be defined as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost (The Committee on Financial Inclusion, Chairman: Dr. C. Rangarajan). 1.2 Financial Inclusion, broadly defined, refers to universal access to a wide range of financial services at a reasonable cost. These include not only banking products but also other financial services such as insurance and equity products (The Committee on Financial Sector Reforms, Chairman: Dr.Raghuram G. Rajan). Household access to financial services is depicted in Figure I. 1.3 The essence of financial inclusion is to ensure...
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...RISK MANAGEMENT THE NIGERIAN BANKING SECTOR FOR ABI ALCHEMY BUSINESS INTELLIGENCE BY OYINDAMOLA OMOSEBI CONSULTANT ALCHEMY BUSINESS INTELLIGENCE 5TH MAY 2012 Table of Content 1.0 Overview of Risk Management 1.1 Principle of Risk Management 1.2 The Risk Management Process 1.2.1 Risk Identification 1.2.2 Risk Assessment/Measurement 1.2.3 Risk Mitigation 1.3 Risk Management Plan 1.3.1 Implementation 1.3.2 Review and Evaluation of Plan 2.0 A Review of Risks in Banking 2.1 Overview of Risk Management Practices in Nigerian Banks 2.1.1 Reputational Risk and Confidence Crisis in the Nigerian Banking Industry 2.1.2 Operational Risk 2.1.3 Credit Risk 2.1.4 Human Resources Risk 2.1.5 Risk Associated with Mergers and Acquisition 2.2 Current Regulatory and the Way Forward 3.0 Summary and Conclusion 1.0 Overview of Risk Management There is risk in every business because of uncertainty about future events and exposure, almost everything we do in the business world involves risk. This is the probability that organization or an individual will be unable to meet some expectations set for itself during a given period or could incur a financial loss because of some known or unknown threats or events outside his immediate control. Therefore, Risk Management is the identification, assessment, and prioritization of these risks followed by coordinated and effective application of resources to minimize, monitor, and control the probability and/or impact...
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...a formal system of foreign exchange arose. As trade between nations developed, Britain, as the nation with the largest and strongest navy, could spread its commercial interests far and wide. It therefore became the most active trading nation, with a vast empire of colonies. As a result, Britain’s currency, the pound sterling, became a benchmark to which other currencies were compared (and exchanged) for most of the seventeenth, eighteenth and nineteenth centuries. Today, most currencies are compared to the U.S. Dollar, currently the most active and commercially strong trading nation; many currencies are still “pegged” to the U.S. Dollar for their exchange rate. Because FX risks can be identified, they can be managed. Foreign exchange management requires that governments, companies, and individuals understand the factors that influence the valuation of currency. By identifying these factors, they can enter into transactions that mitigate the risks to acceptable levels. These transactions, or hedge positions, are designed to maximize the economic benefit of foreign exchange receipts, and payments for governments, multinational companies, or individuals 1.1. Foreign Exchange Foreign Exchange (FX) is the conversion of currency of one country to the currency of other country whereas foreign currency is any currency other than the country’s own currency. 1.2. Foreign Exchange Market Foreign Exchange Market is a market where the...
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...THESIS ON E-ENABLED RELATIONSHIP MANAGEMENT IN BANKING SECTOR IN INDIA EXECUTIVE SUMMARY Relationship banking may be defined as the provision of financial services by a financial intermediary on the basis of long-term investment in obtaining firm or customer specific information through multiple interactions with diverse financial services (Boot, 2000). E- Enabled Relationship banking system refers to use of Information Technology and especially the internet. Customers could get connected by a network service provider directly to a host computer system of a bank such that customer service requests can be processed automatically without need for intervention by customer service representatives. Most of these systems are capable of distinguishing between those customer service requests which are capable of automated fulfillment and those requests which require handling by a customer service representative. Marketing is different from selling mainly in terms of orientation. In selling the efforts are product centred where as customer centric is the key to marketing. Marketing starts with target market and earns through customer satisfaction. Bank credit is a service product and not a physical product like soap. The service product is difficult to market because it is intangible, perishable (ends with single transaction), its heterogeneity makes each...
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...LONDON SCHOOL OF BUSINESS AND FINANCE CREDIT RISK MANAGEMENT OF NON-BANKING FINANCIAL INSTITTUTION IN GHANA (A CASE STUDY OF TF FINANCIAL SERVICES) BY STEPHEN KWADWO NTIRI A Thesis Submitted to the London School of Business and Finance in Partial Fulfilment of the Requirement for the MBA Degree in Financial Services MARCH 2010 DECLARATION I Stephen Kwadwo Ntiri hereby declare that except for references to other people’s work, which have duly been acknowledged, the work presented here was carried out by me, MBA student of Financial Servies at the London School of Business and Finance (LSBF), under the supervision of Randolph Metz-Johnson. I also declare that this work has never been submitted partially or wholly to any other institution for the award of a certificate. …………………………………………… ……………... Stephen Kwadwo Ntiri Date (Student) ………………………………………… …………… Randolph Metz-Johnson Date (Supervisor) Dedication This research project is dedicated to Almighty God for His abundant blessings and protection given me throughout this study, and also to my family for the support I received from them. Acknowledgement I am most grateful to Almighty God who through His infinite mercy and love guided me throughout the duration of the programme. I wish to acknowledge the help and encouragement I got from the entire staff of TF Financial Services, especially Mr. Benjamin Turkson, which has enabled me to complete this work. I also want to thank my wife, Esther Yamoaba...
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...A PROJECT REPORT ON STRATEGIC MANAGEMENT. SUBMITTED TO : NIILM-CMS SUBMITTED BY: SIDDHARTH ATMARAMANI PGDM (2010-2012) ROLL NO. 2010169 UNDER THE GUIDIANCE OF: MS.RITU SRIVASTAVA ANSWER 3 : OPERATIONAL EFFICIENCY OR STRATEGY For a company to be successful it is required for it to be flexible enough to adapt to the changing economic conditions. They must outbeat their own benchmarks continuously to achieve best practices. For example regarding axis bank : Profit after tax up 34.76% to `3,388.49 crores Net interest income up 31.14% to `6,562.99 crores Fee & other income up 32.39% to `4,135.16 crores Deposits up 33.93% to `189,237.80 crores Demand deposits up 17.78% to `77,767.40 crores Advances up 36.48% to `142,407.83 crores Retail assets up 33.32% to `27,759.23 crores Network of branches and extension counters increased from 983 to 1,390 Total number of atms went up from 4,293 to 6,270 Net npa ratio as a percentage of net customer assets down to 0.26% from 0.36% Earnings per share (basic) increased from `65.78 to `82.95 Proposed dividend up from 120% to 140% Capital adequacy ratio stood at 12.65% as against the minimum regulatory norm of 9% And also they must nurture a few core competencies to stay ahead of rivals. Eg. Rivals can quickly copy any market position and competitive advantage is at best temporary. For example, in the banking industry if any bank comes up with a new product or scheme or merges up with other or introduces cost cutting approaches...
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... In Canada recession was less severe and they face no banking failure due to the size and diversification in their large institution has maintained their stability. New Entrant was limited by Canadian government and I exchange chartered bank with provide them financial stability, in Canada focuses on banking sector that’s why brokers dealers and security market remain much at smaller .The banking system of branch was oliogiopolisty that imply the system which has limited supply of banking services and cost as compared to their competitors . In our previous work (Bordo et al., 1994) we analyzed that the Canadian banking is not categorized in higher cost as compared to US. The banking of Canada same returns on equity and largely used MMMFSs After 1987 they became a vital part of Canada banking, at that time government had given them permission to create MMMFs and half of total MMMFs are kept at bank which means that they are within the banking system. According to (Byung kyong & Niamh Sheridan,2012) Canada’s three large bank weighted average is two an half time smaller than Australia’s four major banks however non performing rate of housing loans in Australia and Canada are almost same in recent years. The mortgages in Canada are provided by Canada mortgage and Housing Corporation own by Government are assigned at weight of zero risk, therefore the lowest risk of residential mortgages of four large Canadian banking is almost 70% in comparison with 40% of major Australian...
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...highlight important points and add some needed information to the assigned text. The title of this course is Management of Financial Institutions. This is a very broad and a far reaching topic. To make it possible, the course will concentrate on Bank management. Many of the concepts we will learn in course are transferable to other financial institutions. To begin the discussion, let us define banks. What is a bank? What do Banks do? A bank is a chartered financial institution that accepts savings deposits and makes commercial loans. This is the most basic definition of a bank. However, if you look at banks, you will see that they take many types of deposits and make many types of loans. In addition, if you are familiar with banks, you will notice that they act as intermediaries in many financial transactions. The banking is a vital function of the economy; without banks, the economy will not function properly. Why? The answer is that banks provide the link between savers and borrowers. In the US, people are net savers and businesses are net borrowers. Without banks and some other financial institutions, the borrowers, businesses, will not be able to raise finds by borrowing from people, the savers. This function takes many forms. We will look at some if these forms in this course and in other courses in the finance concentration in the MBA program. The Nature of Banking in the US See Chapter 1 in the Textbook With a population of 30 million, Canada has 11 banks; Britten...
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