2017-05-17.1 islamic bank, bandhan bank ..

Uganda

Rail way system
vs nation high ways

manufacturing
clothes manufacturing
house slabs
metal sheets

baobab tree
 32000 gallons of tree store

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love is about appreciation, not about possession

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http://her.yourstory.com/bandhan-bank-profit-0517
Bandhan Bank
    started:2001
      capital: 2 lakh
    specialization: bank for woman
        empowering woman
        small business

    woman problem
        ill treated by husband
        health problems
        illiterate
        no knowledge of banking
        exploited by private money lenders
    place: Kolkatta
    target: West Bengal Villages
   
    owner(founder, md, ceo): Chandra Sekhar Gosh
        age: 55
        family: poor when child
        birth: RamChandrapura village, Great Tripura
        college earning
            gave tuttions
        joined
            BRAC
                international development non profit working for woman empowerment
                    in small villages
                        in Bangladesh
            worked for 10 years
        joined village welfare society
            in 1998
            non profit
            awareness
                about rights
            travelled extensively in villlages

        investor
            brother in law
                1.65 lakhs
            private lender
                35k
            year:2001
        employees
            starting 3
        started
            micro finance

        Bandhan
            meaning togetherness
            mission to connect society

        milestone:
            year: 2002
            Small industries bank of india(SIDBI)
                load of 20 lakhs
            newbranch: Bagnan
                40 km from kolkatta
            15 lakh to 1,120 women

        2009
            register company
                as Non Banking Finance Company
                    with RBI
        2014
            Bank license
        impact:
            79 lakh womean
        initial operation   
            hoogly district
              villages
            purpose
                loan for small business
                    education


        father:
            run sweet shop
            struggle
                to feed family
                children education
    started: 2015, August
    net profit: March 2016, 275 crore
    total desposit: 12,000 crore
    total advance: 12,400 crore

http://www.theweekendleader.com/Success/2428/poor%E2%80%99s-banker.html

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islamic bank
non banking finance company

difference between non banking finance company (NBFC) vs bank

NBFC
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some sections of society
    inaccessible
    remote
    bank facility to illiterate , poor
    work on similar lines as banks

register : Comapanies act 1956
functions
    similar to bank
    give loans
    collect money
    saving money

    mainly
        business loan
        advances
        acquisition of shares
        debentures
        stocks
        bonds
        securities

    indulges
        hire purchase
        leasing
        insurance
        chit business

can not do
    can not issuec checks drawn on itself
    can not issue demand drafts
    can not collect deposits
    can not indulge in agriculture, industrial activity
    can not indulge in immovable property construction
    can not accept demand deposits


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hire purchase
    installment buying, while using it

business advance
    sum paid or received before fullfilment of obligation  ex: supply of good or services

debenture
    long term security
    yielding fixed rate of interest
    issued by company
    secured against assets   

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islamic banking in india


what is islamic banking means

http://www.allbankingsolutions.com/Press-Release-Views/Islamic-Banking.htm
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islamic bank
    follows principles of islamic finance
    started in kerala
    principles of sharia

    no interest based
        no interest given to depositer
        no interest charged from borrower
    no support to economic acitivites
        involving oppression
        invovving speculation
            ex: investment of stock, property with the hope of gain but with risk of loss

    introduction of islamix tax, zakat
    no financing for the production of goods and services which contradict the islamic value

How islamic bank will generate revenue in the absence of interest receive?
Who will pay for the salaries of the staff
bank rent

kar seva by siksh

will guarantee for depositor
rules and regulations of commercial banks CRR, SLR, Base III norms apply

parallel banking

religious based banking
 hindus
 christian

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How islamic bank earn profit?
    no interest
    but profit and loss
     similar to direct investment mutual fund
         rate of interest is not fixed
         some elements of risk
    rental
        bank purchase an asset
        rent to client
            end up in purchase
        similarly in lease agreement
    rentual with eventual ownership(Ijaarah Muntahiya bittamleek)
        bank rent an asset eg: house
            to client
        over time, the client pays the bank
            more than pure rent price for the asset
                this excess is used to increase the share of ownership of asset
                    by end of the term,  the client ownw 100% the asset
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https://www.quora.com/How-do-Islamic-banks-make-money-if-they-cant-charge-interest-because-of-sharia   
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http://www.allbankingsolutions.com/Press-Release-Views/Islamic-Banking.htm       

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how car loans works with islamic bank?

Car price : 10,000 $
bank buys at the same price, but sells at 15,000$
 gives to you

 you can accept or refuse

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divides 60 installments (5 years), 250$

during the tenure

every month
  you have to pay installment (compulsary)
  delay a payment(you have to pay it)
  Take more money on the same loan(refinance), you can take new loan
  Pay partially

During the loan the bank can
    force you to pay  a payment

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if you pay an islamic loan before its completion
    bank will pay u "early payment reward"   
        which would reduce their profit

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Advantage
    loan for 15,000 with no interest payments
        you know the eact date when it will finish
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normal bank can  increase interest any time.

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islamic bank make money
    net profit
    transaction fee
    admin fee

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higher risk in sharia compliant transaction
    cost of capital is higher
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closer to merchant banking
    where bank engages in financing goods rather than money
    ex: owning goods, sharing goods, shipping etc

required perfect documentation
ownerhip
monitoring
highly lucrative but high risk

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islamic bank busy asset (car, truck, house)  client desires,
then sell the asset at market up price to the clietn
    the client then pays off the balance in installments
        there by creating synthetic form of interest

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islamic bank
    earn profit, rental
    risk: loss, asset depreciation                               

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