1. GB30403
CURRENT ISSUES IN OFFSHORE
BANKING
GROUP:
WOZNIACKI—
-- CAROLINE WOZNIACKI—
NO NAME MATRIK NUMBER HE
1 TEW JIA FUH BG09110323 20
2 PANG RUEN RIN BG09110285 20
3 ONG SII YIK BG09110179 20
4 CHIN WAN TING BG09110268 20
5 TAN SUK WEN BG09110109 20
6 LIM XIAN CHENG BG09110343 20
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3. 1.0 INTRODUCTION
1.1 Development of Financial Institutions
Since 1940s and 1950s, theory of financial institutions has
developed. First financial institutions was introduced in 1970s.
In 1967, “Tabung Haji” introduced by Islamic Bank in
Malaysia.
Financial institutions has being more developed associated
with the innovation of technology.
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4. 2.0 OBJECTIVES
Objectives:
To investigate the relationship between customer
acceptance and financial institutions.
To investigate the differences between Islamic and
conventional financial institutions.
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5. 3.0 DISCUSSION AND FINDINGS
3.1 Customer acceptance
Interest rates offered
conventional- interest charge on transaction
activities;
Islamic – Riba is prohibited
Risk and returns
conventional : long term, high risk and
higher return
Islamic : uncertainty (Gharar) is prohibited,
their loss/profit will share between consumers
and Islamic financial institutions
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6. Quality of services
Highly competency, friendliness, and efficiency of staff
Islamic financial institutions have to put emphasis in
order to get greater acceptance
Islamic financial institutions provide Islamic products;
Conventional provides both Islamic & conventional
products
Example :
Bond- Sukuk
Deposits/ savings – Musharakah, Mudarabah
Financing - Murabaha
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7. 3.2 Islamic Finance Instruments
Murabahah
Istisna’a
•is a contract of
•produce a specific
sale and
thing which is possible
purchase at a
to be made according
profit margin
to determined price
between the
and for a fixed date of
supplier and the
delivery
purchaser of the Islamic Finance
good. instruments
Sukuk (Bond)
Ijara (Leasing) •is an investment certificate
•literally means (bond) that represents a
‘to give proportionate interest in a
something on well-defined pool of assets
rent’ that yield income and capital
returns.
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8. 3.3 Conventional Finance instruments
Mutual Fund
•a trust that Insurance
pools the •insurance is a
savings of a risk transfer
number of mechanism
investors who
share a common
financial goal. Conventional
Finance instruments
Pension fund
Mortgage Loan •protects
•is a loan to individuals and
finance the families against
purchase of your loss of income
home in their
retirement years
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9. 3.4 Activities Prohibited by Islamic Finance
•getting earning •earning of
through unethical interest on
(or non-Islamic) contracts of loan
activity (or Riba)
Activities Prohibited
by Islamic Finance
•uncertainty, risk
•debt restructuring
or speculation
that is based on
(Gharar) in
compensations
contracts
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10. 3.5 Which financial institutions better?
Islamic financial institutions
Ethical norms and social commitments
Profit-sharing
Fair distribution
Eliminate economic ills
Conventional financial institutions
Borrowers can earn profits from margin
Regulation of Islamic financial institutions more tight
Has not to bear risk
More familiar in customer perception
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11. 3.6 What are the main results
Positive relationship between customer acceptance
and financial institutions’ products
Islamic financial institutions are differ from
conventional financial institutions
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12. 4.0 CONCLUSION
Financial institutions are likely to be more
developed and competitive globally.
Islamic and conventional financial institutions are
providing more goods and services to customers.
Customer must well-known their acceptance
against the products offered by financial
institutions.
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