Islamic Banking – Key Differences of Components Within a Financial Statements of an Islamic Bank

Let us look at the key differences in presentation of financial statements between conventional an Islamic banking.

Statement of Financial Position (Balance Sheet)

In conventional accounting, the balance sheet has these few components, namely assets, liabilities and owners’ equity. In Islamic banking, there is one additional component called “equity of unrestricted investment account holders”.

In conventional banking, an asset is defined as an item with future economic benefit attached to it regardless whether there is legal control by the reporting bank. For Islamic banking, however, an item can be taken as an asset only when the Islamic bank has legal right to hold, use or dispose of the item.

The other unique feature is the “equity of unrestricted investment account holders“. This additional component is to satisfy the set of customers who invest on the basis of mudarabah which calls for any losses to be borne by the investors (the customers themselves). It is therefore, important to disclose sufficient information to demonstrate the measures taken by the bank to ensure that the interests of this set of customers are considered as part of the strategy of the bank. In conventional banking, they will be treated as liabilities instead.

There are 2 forms of mudarabah contracts:-

  1. Mudarabah Mutlaqah – This is the “unrestricted” mudarabah contract whereby the capital provider/owner allows total freedom to the bank to use the capital for its projects without conditions, specifications, restrictions or limits. The bank is free to enter into any trade agreements, whether normal or deferred or leasing basis, using the owners’ capital. This form of mudarabah is typically used in replacement of the conventional fixed deposit product for retail customers.
  2. Mudarabah Muqqayadah – This is the “restricted” mudarabah contract. The bank is given certain parameters (restrictions and conditions) on how to use the capital provided by the owners.

Statement of Changes in Restricted Investments and Their Equivalent

This is the statement to report the use of mudarabah muqqayadah investments whereby the bank is to undertake to use the funds for specific investments. This pool of fund must be separated from other funds as the returns from this fund will be shared among this particular group of investors.

Apart from the returns or losses for the group of restricted investors, the statement should also report profits or losses before deducting the investment manager’s share of investment profits/losses. The bank’s share of compensation as the investment agent is also known as mudarib.

Statement of Sources and Uses of Zakat and Charity Fund

This is required only when the bank established a zakat and charity fund whereby the bank acts as a fiduciary of that fund. The bank is responsible for collection and distribution of all or part of zakat and charity funds.


All About Bank Teller Jobs and Work Profile

Many of us enjoy professions that are connected with financial and accounting subjects such as an accountant or a bank teller. Bank teller is the person who records the daily routine bank transactions and tallies the balance amount at the end of each working day of the bank. He/she also processes the deposits of account holders and pays funds as required by the account holders. Such jobs are required by every other bank in any corner of the world. Individuals interested in such a profession can scour online education mediums for diploma courses in banking.

Bank Teller Job Profile:

o Receiving cash or check from various account holders or customers as deposit

o Verifying the pay amount and check endorsements

o Examining the cash given by the customers so as to prevent any money fraud

o Giving out cash to customers against their check deposits, but after closely verifying the signature and account balance of the customers

o Feeding each and every bank transaction into the computer and providing printed receipts to the account holders

o Counting cash balance in the teller deposit container at the beginning and end of every working day. (in relation with the banking transaction that takes place every day)

o Preparing certified checks, traveler’s checks, cashier’s checks, bonds, etc according to the bank rules

o Explaining all the banking procedures and services to new customers

o Substituting other customer service executives if needed

o Helping customers open bank accounts, getting access to deposit lockers and understating ATM operations correctly.

More about Teller Jobs:

Though bank teller jobs may seem to be mundane and boring; it is a very important profession that needs the person to be highly efficient and accurate in his/her account dealings. Nowadays, due to the automatic teller machines (ATM), the teller’s workload has decreased considerably.

Qualifications Needed To Become a Bank Teller:

Most of the banks or financial institutions set certain norms for bank teller jobs such as the following:

o Minimum High School qualification

o Good mathematical aptitude

o Excellent communication skills

o Relevant typing speed

o Attending in-house training sessions

o Some basic experience or firsthand knowledge of banking job


New Mexico Car Insurance Guide – Find Cheap New Mexico Auto Insurance Rates

For those of you driving around in the Land of Enchantment, do you know what having New Mexico car insurance really entails? Every state has its own set of rules. Therefore, it’s important that you understand New Mexico’s rules and regulations before hitting the road. Read on to learn some of the basics of auto insurance in New Mexico and then see if maybe you can find cheaper NM car insurance rates when you are finished.

Basic Auto Coverage for New Mexico Drivers

When it comes to New Mexico car insurance, you must have liability for your automobile. This is the only basic requirement of New Mexico drivers. With this said, you should understand the breakdown of the minimum you are required to pay concerning your basic liability coverage.

The state of New Mexico requires the following minimums of its drivers:

$20,000 per person for death or injury of one person

$50,000 per accident for death or injury of two or more people

$10,000 per accident for property damage

When looking at a New Mexico car insurance policy, you will most likely see the above numbers listed as 20/50/10. These numbers really are important to understand. The first number is the maximum of what your insurance company will pay out per person injured in an auto accident. The second number is what is paid out for medical costs. The last number is the amount that will be paid for property damage. Property can range from another person’s house, vehicle, building, light pole, and more.

Take note that if the $50,000 doesn’t cover the total medical costs of the injured party or parties, you could in fact be sued for more money. This is why it’s always a good idea to consider upgrading your New Mexico auto insurance coverage.

New Mexico Car Insurance Upgrade Options

In a nutshell, if you can afford more NM auto insurance coverage, you should get it. Although it’s not necessary, it can be quite beneficial should the repercussions of an accident exceed your basic liability.

Some supplemental insurance you can get to upgrade your basic policy are:

Comprehensive – insures damage caused by non-accident circumstances such as theft, weather damage and vandalism.

Uninsured and/or Underinsured – provides coverage to you when the other driver lacks insurance or pays less for their insurance than you do.

Collision – protects your vehicle when damaged by an object or another vehicle.

New Mexico Car Insurance Alternative

Yes, there is an alternative to having insurance coverage through a New Mexico car insurance provider, but it can be a little harder on your wallet. According to New Mexico rules, an individual can drive the roads as long as they can prove financial responsibility. What this means is that you don’t have to have insurance, but you do have to have $60,000 set aside as a cash deposit or surety bond.

With this said, it means that you really don’t have much flexibility should your accident contain extensive damage. The $60,000 might not be enough to protect your assets.

For those of you repeat offenders out there, this is your only other option if you wish to drive. Having a record of habitual recklessness will result in a New Mexico car insurance company declining your request for coverage. To sum it up, do your best to keep your driving record in the best shape possible.

New Mexico IIDB and Penalties

The New Mexico Insurance Identification Database (IIDB) monitors the insurance status of registered drivers. How does it work? When you obtain New Mexico auto insurance coverage, your provider will update the database. If you fail to make payments or do anything else to cause a lapse in your policy, your provider will update the database with that information as well.

If the database runs across an uninsured driver, a request to fix the problem will be sent out via mail. If you keep your car insured, there’s really no reason to receive contact from the IIDB.

If you get pulled over by an officer while driving and fail to have insurance, you can probably expect a citation. If by chance your insurance card was hard to find, then you can take it into court to waive the ticket. However, if you were uninsured at the time you were pulled over, you may be charged with a misdemeanor, lose your car’s registration or have to pay a fine up to $300.

Finding Cheap New Mexico Auto Insurance Rates

As stated earlier, you should always get as much auto coverage as possible. It’s smart, it’s practical and it could save you from a lot of financial headaches in the future. Shop around and compare multiple insurers to find the cheapest New Mexico car insurance rates.


5 Factors that Affect – Influence Auto Insurance Rates

The world of auto insurance is complicated and premiums payable for a given policy vary from person to person. Simply put who you are determines how much you will pay as car insurance premium. Automobile insurers use a large number of risk factors to compute how much premium is payable by any individual.

Basic factors that determine how much you need to pay for auto insurance are:

1. The age of the driver. Young and old drivers need to pay more insurance premiums as they are more likely to have accidents than middle aged drivers. In addition premium payable is determined by the car you drive. If you drive a sports car or any mean machine then your premium will hit the sky as compared to a sedan or compact car.

2. The gender of the driver. Insurance companies have determined that women drivers are not affected by hormone surges or machoness and are so better drivers than men. Statistically women are proven to be safer drivers so a woman driver will pay lower auto insurance than a male.

3. Where you live can change your car insurance rate. Auto insurance companies compute risk by where a car owner resides. Those living in rural areas or suburbs pay lower insurance premiums than those who live in a city.

4. Safe Driving is a factor that influences your premiums. Most insurers lower premiums payable for persons who have a safe driving record for three years and more. So speeding tickets, accidents, parking violations, and running red lights are all factors that can save you money.

5. Your credit history. Most insurance companies consider an individual with a good credit history and score as a lower risk and offer lower premiums on auto insurance. The credit report reflects the fact that you are a responsible individual and are dependable.

Other factors that can lower auto insurance premiums are: safety features in a car; anti-theft devices; eco-friendly fuel use; use of car pools and public transport; exclusive use of vehicle only for personal use and so on.

Insurance companies set premium rates based on factors like make of car, cost of parts, and sticker price of car. In case an individual updates his driving skills regularly and follows all safety norms and rules laid by the highway and road patrols then the insurers offer lowered premium rates.

If you have a membership at the AAA or any other professional body then you may be automatically eligible for a discount on auto insurance rates. Lately if auto insurance is bought online the rates are much lower than when bought through an agent or office. And, different insurers base the premiums on auto insurance based on their experience so while one may consider the occupation of the individual a risk another may give more emphasis on whether the vehicle is used for commercial purposes. The module for calculating risk factors varies from company to company as also the premium rates on auto insurance.

So it is best to get at least 3-4 quotes from different auto insurance providers before making a decision.