Introduction to Islamic Banking and Finance Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Results Evaluation

The all the above discussed studies examine the importance of Islamic banking and finance industry worldwide. The empirical studies also analyze the challenges and issues that Islamic financial institutions faced while operating domestic as well as international level. It was from the findings of the empirical studies that the Islamic banking and finance has grown and improving significantly around the world especially in the Muslim world. The Islamic banking and finance sector have gained so far very small market shares in the financial market around the world.

The findings from the empirical studies also showed that although the Islamic financial institutions growing extensively, but it appears that it may possibly not be able to generate a substantial influence on the international financial system in the near future in term of the revenue. However, the Islamic banks in order to overcome the challenges from the conventional banks need to develop the strategic alliances and combine into the larger financial institutions. In addition to this, a strong legal and institutional framework is essential for accounting and supervision of the Islamic banks in order to compete against the conventional bank.

Furthermore, the achievement of Islamic banking and finance further depends on the formation of equity institutions in order to provide equity capital as well as also for the expansion of secondary and inter-bank markets. The Islamic banks should need to improve the efficiency of their operational activities and should need to reconsider their strategic position as the increasing competition from the conventional banks across the world. Moreover, due to the lack of resources, it is often difficult for the Islamic financial institution to afford the high cost of managing the information system as well as the latest technology in order to measure and evaluate risks in a timely manner.

Question 1

Boubyan Bank

Introduction

Boubyan Bank is a financial institution involved in the provision of banking and investment services that is according to the Islamic Sharia principles through branches of different networks all over the Kuwait. Boubyan Bank has announced innovative banking facilities and products that offer numerous privileges and value added remunerations for the customers.

The banks have structured its services into four segments according to the demands of the customers. The first segment is the consumer banking that provides the variety of products and services such as consumer finance, deposits, credit cards and the other related services. The second segment is the corporate banking that provides the customers different services like Murabaha, ijarah and other related services. The third segment is the investment banking that includes the direct investments, real estate investments and asset management the last segment of the bank is the Treasury that includes both local and international Murabaha along with the other Islamic financial services.

PRODUCTS

Al Wadiah

AL Wadiah is an alternative for the deposits from customers as a current and saving account. It is recorded on the liability side of the balance sheet. The deposit accounts amount in the year 2013 was1, 657,398 KD 000 as compared to the year 2012 which was 1,396,962 KD 000.This showed that the increased in the amount of deposit account for the Boubyan Bank in the year 2013 than the previous year. The heads that come under the deposit account in the Boubyan financial statement include current accounts, saving accounts and fixed accounts. This means that they are the deposits that the Bank received from the buyer comes under the accounts of saving, current and fixed investments that matures monthly, quarterly, semiannually and annually. The non-investment deposits that are in the form of current account are not allowed to any type of the profit and loss as the Bank itself promises to pay the connected balances on demand.

Al Mudharabah

AL Mudharabah is recorded on the liability side of the balance sheet of the Bank. This shows the amount that is due to the bank. For the Boubyan Bank, this the amount of Mudharabah in the year 2013 was 236018 KD 000 as compared to the amount of Mudharabah in the year 2012 which was 207,133 KD 000.This part of the liability consists of the different deposit accounts in the bank.

Al Murabaha

Al murabaha is an agreement where the buyer informed the seller about the price at which deal will be done as well as the amount of the profit. Income from Murabaha is documented on a pattern that reflect a constant periodic profit on the outstanding net investment. It is recorded in the income statement of the Boubyan bank. The income generated from the Murabaha in 2013 was 70,969 KD 000 which showed increased from the previous year as the income generated Murabaha was 64,670 KD 000.This means that there was a rise in the income generated for the Boubyan Bank.................................

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