ISLAMIC BANK FUNCTION AS A MEDIUM OF FINANCIAL INSTITUTIONS

Islamic banking finance economy

by islamicbankingfinanceeconomy.blogspot.com

ISLAMIC BANK FUNCTION AS A MEDIUM OF FINANCIAL INSTITUTIONS

Islamic banks also function as a financial intermediary institution or a financial intermediary. As a financial intermediary, Islamic banks need to bridge two different sides. One side are customers who have funds and others are customers who need funds. Islamic banks to collect funds from the public in the form of savings and investment, as well as distribute it in the form of financing or other permitted forms in sharia. Fund raising carried out by Islamic banks in general can be done using wadiah and mudaraba contract.The second major function in Islamic banking is the distribution of funds to the public role in the form of financing or in the form of placement of other funds in accordance with sharia. Most of channeling funds to a third party is in the financing. Financing provided by the bank in outline terms of akadnya, can be divided into three types, namely the sale and purchase agreement, cooperation, and lease. The third type of financing channeled Islamic banks have different characteristics, so the benefit that will be derived Islamic banks will also be different.Financing purchase contract will generate profit margins, financing a business cooperation agreement will menghasilakn revenue-sharing, and financing with lease agreement will generate rental income.As intermediary institutions, Islamic banks raise funds from the public that the excess funds. People who place their funds in the form of deposits will earn funds are less in the form of deposits will get a bonus amount depends on the Islamic banks. People who save their money in the bank syariah using cooperation will be assigned the contract for the results in accordance with an agreement made between Islamic banks and customers.On the reverse side, there are people who need funds to develop their business or to meet personal needs, while its limited funds. This fund the needs can be met by the bank through financing provided or by investing in other forms. As remuneration for the distribution of funds to the public, the bank will receive remuneration in accordance with his contract.