Islamic Banking Solution

Inspirisys Solutions Limited is a preferred Core banking solution implementing partner for Infosys Finacle. With more than 25 fresh core banking application implementations and 30 CBS customizations, ISL possesses in-depth domain experience in the Banking domain. ISL has successfully delivered core banking implementation and customization projects across the globe as well in the UAE. Islamic banking activity that is consistent with the principles of sharia (Islamic law) and its practical application through the development of Islamic economics. As such, a more correct term for Islamic banking is sharia-compliant finance. Islamic banking also finds its roots in Islamic finance and all type of transactions are interest-free and risk-sharing. As a principle collecting interest money is prohibited in Islamic banking procedures.

Islamic Asset Financing

One of the most important characteristics of Islamic financing is that it is asset-backed financing. The conventional/capitalist concept of financing is that the banks and financial institutions deal in money and monetary papers only. The module enables the definition and offers a range of asset products based on Islamic concepts of Murabaha, Ijarah, Istisna, Tawarruq, and Qard Hasan. It handles the end-to-end processing of Islamic Asset Financing including key activities like Commodity Purchase & sale, tracking of unearned income to financing account payoff and closure.

Types of Islamic Financing

Financing Process:

Product set up in the application, maintain commodities, maintain commodity purchase details, Purchasing and sale of commodities, Account open and disbursements

Murabaha:

It’s a product where the bank buys and sells as an asset to the customer for cost plus profit. The payment is done on an instalment basis over a period of the loan. The ownership of the asset remains with the customer for the duration of the loan.

Tawarruq:

A source of funds by combining two separate sales and purchase transactions. Financing for personal needs with any purchase of assets. A tripartite sale where Merchant sells to the bank at a specified price. The bank sells the same to customers on a deferred payment basis at a marked up price

Ijarah:

It’s about a financial lease with the transfer of ownership. The rental calculation is flexible based on LIBOR. Each installment paid by the customer is towards rental. It’s not based on selling price. Repricing allowed. Reschedule permitted. Deferment allowed. Having depreciation features.

Istisna:

The bank finance may be for construction and the gestation period is long. The bank takes possession of the building or assets and sells them to the customer. Once the sale is complete, the second phase of the finance will become either Murabaha or Ijarah. Once the construction phase is over the profit amount is either collected from the customer account or capitalized depending on the agreement. Offered on a fixed and floating rate basis.

What ISL can offer to Islamic Banking Clients?

Option1: If Islamic Banking is available as part of the existing Core Banking application, we can support the following:- Develop and add additional features to an existing menu, Develop and add a menu to meet the available new feature and develop new additional reports.

Option2: If Islamic Banking is available as a stand-alone system, we can support the following: - Development of offline or online interface with Core Banking application and Development of two way upload/download of data from/to Core Banking application.

Option3: If Core Banking Application is available without an Islamic Banking functionality, we can support the following: - Development of stand-alone module to take care of Islamic Banking requirements by below approach:
Detailed System Study at on-site/off-site to understand the requirement, Design and development, Deployment at onsite for User Acceptance Test, Support for deployment in the production environment, Post live support and Detailed User Manual