Islamic banking department

Kabul bank has established an Islamic banking department under the technical support of Shariaa Board consisted up of famous Ulmas and scholars    of Islam.

Department has all Basic Banking functions like operation Investment and credit.

Introduction of Islamic Banking

Islamic Banking is a new phenomenon in the world. Under the Islamic Banking, Banks never offer and give interest to its depositors and neither charges interest on loans and credits, but open the accounts and give loans and credits and do investment under the Islamic Banking principles applicable worldwide. These principles including Alwadia (safe keeping) Mudarabah ( trustee finance) Musharaka ( partnership finance) Qurdal Hassana, Dhaman, Murabahah, Tawaroq, Bai Mowajal, Bai Salam and other principle applicable in modern Islamic Baking around the Globe.

Types of Accounts

Kabul Bank offering following Islamic banking accounts under the different principles of Islamic banking for its customers.

A – Al- Wadia Current Account

B_ Hesabul Jary (Qurdal Hassana)

C– Hesabul Tawfierr (saving account)

D- Hesabul Estismar or Term Deposits

Kabul Bank 0pen four kinds of accounts under Alwadia `Qurdal Hassana `Mudarabah and Musharaka principles of Islamic Banking and Finance 

1-Alwadia Hisabul-Jary current account)

     Current account has no distinction from conventional banking current accounts. Under Alwadia principle of Islamic banking and Islamic bank deposits public money with guarantee of immediate repayment to customers without any delay.

Under the current account no interest and no profit will be shared and no any kind of loss will be shared between bank and customer.

2- Current Account (Qardul Hassana)

 Current Accuont Qardul Hassana is opened under Qadul Hassana principle of Islamic Banking and Finance.

Under this contract (Account holder) does not illegible to claim profit and also not liable for any kind of loss KABUL Bank can use deposited money for credit and Investment under the instruction of its Shariaa Board .

3- Hesabul Altawfier (Saving Account)

This kind of accounts will be opened under Mudharabah and Musharakah principle of Islamic banking. Under these principles bank hold the right to use the fund and invest the fund to earn profit.) The customer agrees to share profit and loss.

Hisabul Estismar (Fixed Deposit)

This account will be opened only under the Musharakah or Mudharaba principles of Islamic baking. For specific fixed terms of one year two years three years four yeas and five years and more than that. This kind of account can only be opened after the signing an agreement as per the format provided by Kabul Bank. After filling the appropriate form and signing the agreement the account will be opened. Account can be opened as single or joint signatories.

Lending and investment

The products will include all kinds of loans and credits that modern banks offer including L/C, Bank Guarantees, Credit Cards and Debit cards, transfer and other products.

The deposited money will not be invested in the following sectors and projects/ businesses.

1-         In production and import and export , buy and sale of Alcoholic Drinks like                                                                                                                  e Wines, whisky, Vodka and others

2-         In  production and import and export , buy and sale of Drugs and Drugs related products

3-         In production and import and export , buy and sale of Haram meats and animal products of Pork, and other animals

4-         Gambling and Casino

5-         In the night clubs and other centers where naked women are presented for entertainments

6-         In the prostitute centers and prostitute related works

7-         Production and import and export, sale and purchase of adult products and sexy pictures and movies and internet sites and printed materials

8-         Terrorist camps and supporting activities

9-         9:- All other businesses and types of business not allowed in Islam

10-     10:- All other businesses and economic activities forbidden by the enforced laws and regulations of the country

11-     Any other case that is forbidden by Shariaa board of Kabul Bank and Shariaa Council of Da Afghanistan Bank

The Funds can be invested in the following sectors and projects

1-         In construction and related activities

2-         In Islamic Banking and Financing activities

3-         In Import and Export of allowed commodities and goods

4-         Industries excluding those that are mentioned above

5-         Energy generation and supply projects

6-         Infrastructure projects

7-         Electronics and electrical instruments and equipments manufacturing and trade

8-         Mines and Mining Sector services

9-         Agriculture and agro-business activities and businesses

10-     Food Commodities

11-     11: Oil and Petroleum products and GAS

12-     Oil and Gas Refineries plants and projects

13-     13: ICT equipments and ICT Sector

14-     Others sectors and projects not forbidden by Islam

15-     Other projects that is feasible and recommended by investment committee of bank after appropriate approvals 

 Dr. Alam Khan Hamdard Head of Islamic Banking-

Musharaka

Definition:
'Musharakah' is a word of Arabic origin which literally means sharing. In the context of business and trade it means a joint enterprise in which all the partners share the profit or loss of the joint venture. It is an ideal alternative for the interest-based financing with far reaching effects on both production and distribution.

The Concept of Musharakah

Musharakah" is a term frequently referred to in the context of Islamic modes of financing. The connotation of this term is a little limited than the term "Shirkah" more commonly used in the Islamic jurisprudence. For the purpose of clarity in the basic concepts, it will be pertinent at the outset to explain the meaning of each term, as distinguished from the other.

The basic rules of Musharakah

1. Musharakah or Shirkat-ul-amwal is a relationship established by the parties through a mutual contract. Therefore, it goes without saying that all the necessary ingredients of a valid contract must be present here also. For example, the parties should be capable of entering into a contract; the contract must take place with free consent of the parties without any duress, fraud or misrepresentation, etc., etc.

Distribution of Profit
The proportion of profit to be distributed between the partners must be agreed upon at the time of affecting the contract. If no such proportion has been determined, the contract is not valid in Shariaa.
For example: there are three partners in business and invested 10000 Afghani per head, after calculation they got 30% profit i.e. 9000 Afghani. In this case every partner will receive 3000 Afghani, but the working partner (bank) will receive 15% extra profit from the total profit earned by other two inactive partners.
The ratio of profit for each partner must be determined in proportion to the actual profit accrued to the business, and not in proportion to the capital invested by him. The correct basis for distribution would be an agreed percentage of the actual profit accrued to the business.

Sharing of Loss

But in the case of loss, all the Muslim jurists are unanimous on the point that each partner shall suffer the loss exactly according to the ratio of his investment. Therefore, if a partner has invested 40% of the capital, he must suffer 40% of the loss, not more, not less, and any condition to the contrary shall render the contract invalid.

Management of Musharakah

The normal principle of Musharakah is that every partner has a right to take part in its management and to work for it. However, the partners may agree upon a condition that the management shall be carried out by one of them, and in banking  Kabul Bank will manage , as a manager Kabul Bank is entitled to get 15%  out of total profit earned .And no other partner shall work for the Musharakah. But in this case the sleeping partner shall be entitled to the profit only to the extent of his investment, and the ratio of profit allocated to him should not exceed the ratio of his investment, as discussed earlier.

 

Mudarabah

Mudarabah is used for account opening and in investment in Islamic banking and Finance.

Rabul Mall(Financer)

Rasul Mall(Money, fund)

Mudarab(working partner)

Mudarabah is only profit sharing agreement between bank and customer. Under Mudarabah profit will be shared between bank and customer in 50% ratio or as agreed by both parties, while loss will be only for financer in ordinary situation.
In case of negligence and natural disaster or “Force major” the loss will be shared as per the decision of Shariaa Board of Kabul Bank under the instructions of Islamic Banking law and Regulations of Da Afghanistan Bank.

Kabul bank in convenience for its customer opens account both under Mudarabah and Musharakah governed by the customer and bank written agreement.

wrAlwadia: Under this principle Kabulbank opens current account, money remains as deposit with bank with immediate repayment assurance from Kabulbank, Kabulbank can't use it . This type of account has no loss or profit .

For more details please contact the following phone Number or Email us: 

Email: Islamicbanking@kabulbank.af / alamhm@kabulbank.af

Phone No:0776601198 / 0799222666