Commercial Bank Case Study

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Commercial bank is one of the financial institution that provide service and activities of bank transaction to all clients based on the terms and conditions suitable for the consumer needed. Deposit operation include to the bank activities that offer to clients to run their activities transaction. This facility provide by the Islamic and conventional bank to ensure that all customers can use this opportunity for own transaction purposes. Deposit can be describe in two approach which are transaction involving a transfer of funds to another party for safekeeping or a portion of funds that is use as security or collateral for the delivery of a good. In term of bank deposit, it is categories in few group of deposit which are current deposit account, …show more content…
Islamic banks to invest deposits have saved investment projects in industrial, agricultural, and commercial serve community. Apart from that, by looking at the operation on how the investment deposit account works is the Islamic bank acts as the deputy agent in dealing the investment deposit account, while conventional bank serves as the debtor in this account, which pay any interest to customer on this type of account. Profit share that gain form the investment also difference between Islamic and conventional deposit products. The Islamic bank operate and investe to achieve earnings and then distributing profits to depositors after deducting administrative expenses. The profit share rate will be determined by deal a contract between the investors and the Islamic …show more content…
Islamic deposit products introduce Sukuk as one of the alternative to generate profit in form of investment. Sukuk can be refer as certificates of equal value which evidence undivided ownership or investment in the assets using Shariah principles and concepts. In Sukuk concept, the money is put into the assets of the project in order to generate profit. When the investor buy the Sukuk and become a Sukuk holder, they will receive certificate from the issuer to evidence ownership and entitle to receive periodic profit payments on the principle that invested. On the upcoming maturity, the Sukuk holder will get back the principal amount of investment. Sukuk also must be are based on Shariah compliant. Types of Sukuk including Mudarabah (profit-sharing), Murabahah (cost-plus sale), Al-Wakalah (through agent), and Ijarah
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