Theory and Practice of Banking Theory and Practice of Banking-Islamic and conventional What is the banking system in Bangladesh? Now, banks in Bangladesh are primarily of two types: Scheduled Banks: The banks that remain in the list of banks maintained under the Bangladesh Bank Order, 1972. Non-Scheduled Banks: The banks which are established for special and definite objective and operate under any act but are not Scheduled Banks. What is the concept of banking? Banking is defined as the business activity of accepting and safeguarding money owned by other individuals and entities, and then lending out this money in order to conduct economic activities such as making profit or simply covering operating expenses. ... Above all, central banks are responsible for currency stability. What is the role of banks in the financial system? Banks perform various roles in the economy. First, they ameliorate the information problems between investors and borrowers by monitoring th...
ISLAMIC BANKING MODES & TERMINOLOGY Al-wadeah : Al-wadeah Current Account on the principles of Al-wadeah. The Bank commits to refund money deposited in these Accounts on the demand of customers. On the other hand the Bank takes permission from customers that the Bank may utilize their money. Customers may operate these Accounts as their desires. No profit is disbursed in these Accounts and depositors do not bear any loss. Al-Wadeeah (BB) : Fund which is deposited with Banks by the depositors with clear permission to utilize /invest the same is called Al-Wadeeah. Islamic banks receive deposits in Current Accounts on the basis of this Al-Wadeeah Principle. Islamic banks obtain permission from the Al-Wadeeah depositors to utilise the Funds at its own responsibility and the depositors would not share any profit or loss earned/incurred out of using of this funds by the bank. The banks have to pay back the deposits received on the principle of Al-Wadeeah on dema...
What precautions should be taken by a banker before advancing What precautions should be taken by a banker before advancing the loan or Investment? No doubt the advancing of loan is also risk as well. If the loan is for a longer period then risk will be also greater. So before advancing the loan a banker should keep in view the following precautions : Business Volume: Character : Character of the borrower depends upon honestly, family background, nature of employment, habits and the record of the past. So before advancing loan these things must be considered. 2. Ability To Repay : Before advancing loan a banker must be satisfied with the sources of the repayment of the funds. 3. Check The Assets : The banker should also check the property capital and borrower. This property can kept as a security of loan. In other words if the businessman financial condition is sound then it can be lended otherwise not. 4. Purpose Of Financing :- Funds should be provid...
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