This document provides an overview of the emergence and development of Islamic banking in Sudan over several decades. It discusses how Sudan pioneered Islamic banking with the establishment of Faisal Islamic Bank in 1977. This sparked the founding of other Islamic banks and a transition of Sudan's entire banking system to Islamic principles between the 1980s-1990s. Key developments included new regulations, institutions, and the application of Shariah-compliant financing modes like Murabaha, Musharaka and Mudaraba. Islamic banking in Sudan served as a model for other Muslim-majority nations.
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The sudanese islamic banking by al siddig talha mohamed
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2. In response to the requirements of the Central Bank of Sudan, the bank fulfilled the restructuring program by increasing its capital to 110 Million Pound by 31/12/2009.
3. In compliance with the requirements of Central Bank of Sudan, and coping with international development in the sphere of Risk Management, the bank established a Risk Management Department and took appropriate measures to ensure propagation to the best practices .
4. Further, the bank continued to intensify external relations with foreign banks and financial institutions.
5. The bank utilized modern technological devices extended to customer in all sectors, strictly adhering to high professional standards and using highly advanced information technology.
6. The bank also participated to relief to the poor, disabled, and sick people and other categories of needy people in the society, through a program of special solidarity and humanitarian donations.
14. Immediate change of the credit facilities granted under the rate of interest system to appropriate Islamic modes of finance after obtaining the consent of the customer or liquidate of those facilities if no agreement was reached with the customer.
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16. Establishing the High Shariah board for the banking system and Financial Institutions.
24. ii- Ensuring efficient distribution of financial resources amongst the different investment opportunities that have positive economic returns.
25. iii- Introducing Islamic financial tools and instruments for medium and long term investment.
26. iv- Enhancing the role of the Islamic Banking System through the application of those tools and instruments according to the Islamic financial Principles.
28. The bank Deposits Security Fund acts to provide insurance to the bank deposits and to compensate for losses through Takaful (mutual support ) between the Monterey authorities, banks and depositors. This was to be realized through the takaful fund for securing saving and current deposits, the Takaful Fund for Securing Investment Deposits and the Takaful Fund for Compensation in cases of complete defaults by clients .
31. Managing shares that are wholly or partially owned by the bank of Sudan and the Ministry of Finance, and lodged with the banks corporation, financial institutions, and companies.
32. Assisting the bank of Sudan in managing liquidity to achieve the objective of the Monterey policy .
33. iii-Organizing auctions for sale of Central Bank Musharka Certificates (CMCs) and the Government Musharka Certificates (GMCs), which are Shariah compliant tools for managing banks liquidity and financing budget deficits.
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35. At the end of 1998 the Bank of Sudan issued the Comperhensive Banking policy (1999-2002) that contained six major areas of emphasis, including:-
44. 3- Couninuing application of the accounting and auditing standard of the accounting and auditing Organization of Islamic Financial Institutions (AAOIFI).
45. 4- Issuing a manual for the application and use of the Islamic modes of finance and instructing the banks to strictly adhere to the manual when granting finance.
47. 6-Starting execution of the recommendations of the Conference of Islamization of the Economic Sector (1998) that were mainly related to the banking sector.
48. 7- Documenting the experience of the banking sector in Sudan, in collaboration with different concerned parties.
49. 8-Activating the role of internal auditing to be able to validate the compatibility of the activities of banks and other financial institutions to Shariah in collaboration with the Shariah Board in each bank.
53. Selling at cost with addition of known profit. The owner of the commodity sells it to the buyer at the capital price and ads a profit agreed upon by them. The bank practices selling by profit to the buyer. When the client asks the bank to buy a commodity from the local market or import it from abroad, the client describes the commodity and give complete specification. Then the bank purchases the commodity, sets the price, and acquires it. Then the bank supplies it to the applicant at its cost plus a known profit.
59. v-If the applicant accepts it, they conclude a selling-by-profit agreement. But if he refuses, the commodity remains the ownership of the bank.
60. ((There is existence of some misapplication of Murabha which turned out to rather fictitious in some cases due to the difficulty of tracing its implementation)).
66. The formula of implementation of the partnership at the bank:-
67. 1-The client desirous of the partnership submit an application to the investment section at the branch including his name, address, location of his business, the name of the party recommending him, the kind of partnership and its subject, the volume of the partnership, the quantity of his contribution, the period of time at the end of which the partnership will be settled, and his experience in the specific sphere.
68. 2-The client provides a feasibility study of the business showing its economic, technical and social feasibility. If the feasibility study gives proof in favor of the business, then they recommended its ratification.When the approval is obtained, the bank agrees with the client on conditions, leading the drafting of the partnership contract for the specific business. The agreement includes the opening of a current account for the business, the manner of storing goods, statement of the partnership administer, the method of marketing the goods, the period of time agreed upon for settlement, the manner of settlement and distribution of profits. The contract stipulates that the loss is shared by two parties, each at the rate of his contribution.
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70. 6- There is another kind of partnership in which the bank and the partner agree that the bank will sell his share to the partner in the partnership by installments. This is applied in the field of production and services schemes and is known as the decreasing partnership.
82. It is a trustee contract whereby the bank provides capital and the client provides labor for joint venture. The profit generated by the venture is divided according to a predetermined ratio. In the Mudaraba contract is one basic juristic rule governing the transaction, which is that losses are to be borne only by the provider of funds (lender), i.e the bank. The user of funds, i.e. the customer (the borrower) does not bear any portion of the loss unless the loss was due to misconduct or negligence on his/her part.
84. This is sale in which the price is paid immediately for goods to be delivered at a future date. The rational for Salam is the need of producers of agriculture and small-scale enterprises as for these conditions :-
85. i-The price of goods to be delivered later must be received by the seller at a time of signing contract .
86. ii-Delivery of the goods sold must be postponed for a definite fixed time.
87. iii-The goods delivered must be of a type that is commonly available at a later time fixed delivery.
88. iv- The good to be delivered is specific and can be defined physically and quantitatively, such as kilograms of wheat, etc.
89. . Price of Salam can be in installments, that each period has a different price, like –for planting –for clearing –for harvesting. These three steps can help the farmer to get finance at the specific times he need. Also fugha accept the payment of the principal to be made in kind .
99. One of the major differences between an Islamic bank and a conventional bank is that the former mobilizes funds on profit and loss sharing basis, while there is no similar concept on the sources (liabilities ) side in conventional commercial banking, on the uses (assets)side, the portfolio of Islamic Banks is composed of various finance are based on profit-loss sharing principle such as Musharka &Mudaraba.Thus, unlike the situation in conventional banking, the customer –banker relationship in Islamic Banks is not mere debtor/creditor relationship so the whole traditional banking system depends on this principle (Debit /Credit) only , the system of finance made the relation bank and the client only on that basis so these banks use a money as commodity they sell these amount of money with the interest ,the price of money is buled upon this idea only.
100. On the liability (sources ) side for traditional banks ,deposit funds mobilized on sight and time deposit basis constitute an ultimate liability ,as principle of these funds as well as their fixed (pre-determined) interest rates are contractually guaranteed .
101. Islamic Banks on the other hand arrange deposit mobilization on a profite and loss sharing (PLS)basis . Hence ,a depositor is not a net creditor to the bank ,these funds (deposits) which are referred to as profit sharing investment accounts are reported in the balance sheet . The investment account at Islamic Bank buied on the basis of Mudarah mode those who open the investment account be as ( money owner ) and the bank is the second part (Mudarib) the Islamic bank b uses these funds of money according to Islamic principle at a profitable projects and share the profit gain with the owner of these accounts , this type of relation between the bank and the public is quite different for conventional banking system – this sort of relation the government use by the government when add an alternative for treasurey bill that based on the rate of interest but on the Islamic Shareah based on Mudaraba model (Capital –Iabour).
102. Istisna (having something made) =Manufacturing or construction=
103. It is a contract to sell a described items in custody, which requires it to be manufactured in a special way it include specification of the type ,kind, quality, quantity of the subject matter to be produce must be known and the price and the delivery date must be known
108. a current account is one where the client deposits an amount of money at the bank. He shall have the right to withdraw from it by means of cheques or payment orders or any similar instruments . C.A. is adapted in as a defective deposit. It is a loan contract. Also it is a service account that the bank sets aside a number of specialized employees who open the account, receive the deposits, either cash or by document. They follow the movement of the account and supply a periodical statement of the account on demand etc. Whenever deposits and withdrawals are considered, it is not permitted to receive or grant stipulated interest on the operation, because any loan that entails stipulated benefit is Usury. In C.A., it is permitted to take remuneration on the services, but also the bank may extend the service free.
110. They follow the example of current accounts and are governed by virtue of the loan or deposit contract, because the client depositing of money in the saving account and his permission for the bank to deposit it, the bank guarantees it on demand. It becomes a deposit at the beginning and a loan at the end.
112. These represent the deposits lodged at the bank for the purpose of investment. The client delegates the bank to employ it in the investment operations chosen by the client or allows the bank to utilize it in the framework of the directive policies, provided that the profit is distributed according to the conditions agreed upon.
130. 1-The board reviews the company policy wording and forms to make sure that they coincide with the shariah regulations.
131. 2- It reviews the insurance treaties to make sure that they match with Shariah Law.
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133. Checking the company activities to ensure their conformity with Islamic Laws.
134. The head of (SSB) attend the general assembly meeting and expresses the opinion of the Board.
135. The S.S.B answer questions about Islamic Insurance and said ((Muslim scholars are consensus that cooperation insurance is legitimate and permissible)).
137. The Ministry of Finance established a new department for Sukuk organization that a lot of these number of sukuk are available for investment like :=