The federal budget 2022-23 has been presented with the outlay of Rs 9.5 trillion. The Gross Federal Revenue is estimated at Rs 9 trillion and total expenditure is estimated at 9.5 trillion. The total budget deficit is estimated at Rs 3.8 trillion. The growth target has been set at 5%. The budget figures show the large dependency of budget upon the foreign loans and taxes. 41.5% of the total budget i.e. Rs 3.95 trillion will be spent on just debt servicing this fiscal year. It means that the large portion of our budget will be eaten by the debt and…
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The importance of partnership modes in the Islamic financial scenario is not deniable. The ideal modes for Islamic finance practices are Mudaraba and Musharaka. The both of the two have their own benefits and consequences for economics and finance. As far as Mudaraba is concerned, Mudaraba is the unique way of financing mode in which one party invests in the business, which is called as Rabb ul Maal, and the other party manages the business, which is called as Mudarib. In this way, this is a unique blend of investment and management keeping in view the Shariah guidelines in this…
Need of the Institution of Waqf The institution of Waqf may bring a robust socio-economic development in the society as it is based upon human affection and the act of kindness to think to meet the need of others. The main objective of Islamic banking is to implement ideal socio-economic system in the society based on the injunctions of Islam. Collectively, the Islamic banks may do very much with the establishment of the institution of Waqf. The Islamic banks may establish significant Waqf fund for meeting the financial needs of the public. Through Waqf, Islamic banks may get experience many…
Why we have need to use the word Islamic as prefix before Economics, Business, Banking, Finance, Marketing, Management etc.? The answer is that unfortunately the Muslim Ummah turned from the long slumber of centuries due to the international downfall. Over the period of few centuries, the secular and western theories and practices were formulated and imposed upon the world in wise manner. Due to the brutal behavior of Church in the West, the people raise the voice against the Church and Enlightenment Movement of the seventeenth and eighteenth centuries refused any religious interference in the management of human affairs. When…
Islamic Banking and Finance practices are running and growing at the rapid pace and has been proved itself as a viable financial system before the conventional economic and banking system. Here, we must consider whether the prevalent practices are fulfilling the Islamic socio-economic goals and objectives. If not, there is a need to determine the shortfalls and challenges in this direction and suggest the possible solutions in this respect. It is a fact that every system has principles, mechanism, objectives and goals. The same is the case of Conventional & Islamic economic systems. Conventional economic system is based upon man-made…
When we talk about Islamic Banking and Finance, we must first understand the reality and need of Islamic Banking and finance in the present world. In this respect, we must understand and think about some matters that may clear our mind and eradicate confusions. What is the reason of Islamic Banking to begin when the already conventional banking and finance is being run? What is the goal of Islamic Banking and Finance that are not being achieved by conventional banking and finance? Before the emergence of modern Islamic Banking and Finance i.e. in the mid of twentieth century, why the…
When we talk about implementation and practice of Islamic economic system as a whole, we must look at every aspect of Islam as well. Marketing is one of the most important aspects of economics having a wide meaning and sense. Marketing involves each and every action that one performs during the time of production to selling or offering goods and services to the people. Therefore, the concept of marketing is the integral part of economy and without the concept of marketing; the economic practice cannot be performed. Marketing involves the process of attraction and awareness of certain product or service…
Islamic Banking must not be considered as just the execution of Shariah compliant transactions. It must be done with the determination to follow the rules and principles of Islam in every activity and action during the banking hours. Difference between the Customer Services Management in Islamic and Conventional Banks As far as customer services management, there is a clear difference with respect to customer services management between Islamic and conventional banking. To understand this difference, we must keep in mind that conventional banking is based upon man-made laws and Islamic banking is based upon the commandments of Allah. The ideology,…
This world is created by Allah so that everything in this world is in the absolute ownership of Allah and a man is designated as a vicegerent (Khalifah) on earth which means that a man must utilize the resources as a trustee and live in this world according to the commandments of Allah. Since Allah has made this world and all resources belong to Allah, he guides us how to utilize these resources in the best interest of the society and to achieve social welfare into the society. When we look at conventional or secular and Islamic economic thoughts, the…
AÂ REVOLUTIONARY CONCEPT [dropcap]W[/dropcap]hen we start the topic of training and development of Islamic Banking & Finance, first of all, we must keep in mind that in actual sense, it is the revolutionary concept and directly relates to the change of the social behavior. Therefore, we must look at this aspect in a very broad sense. It must not be related only to the training of banking staff and some professionals and management but we must train the whole society so that proper planning and serious consideration are required in this respect as it is a clash with the prevalent economic…
Team Leader-Research, Training & Development Unit, Islamic Banking Group, National Bank of Pakistan [dropcap]T[/dropcap]hough the efforts towards shariah compliance by Islamic Financial Institutions (IFIs) and regulatory bodies at regional and international levels are worthwhile but keeping in view the general observations regarding prevalent approach, practices and operations of IFIs, some considerations and work must be done beyond the prevalent approach that will lead to real and effective shariah compliance. As we all know that Conventional Banking & Finance has absolutely a different perspective from Islamic Banking & Finance. These are two different concepts having roots in Conventional Economics and Islamic Economics respectively. Therefore, Islamic banking and finance…