ANSWERS TO SOME FREQUENTLY Dissertation Example | Topics and Well Written Essays - 1000 words

ANSWERS TO SOME FREQUENTLY - Dissertation Example 2. WHAT IS THE SCOPE OF TRANSACTIONS TO WHICH THE BAN ON RIBA IS APPLICABLE? DOES THE TERM APPLY ONLY TO THE INTEREST CHARGED ON CONSUMPTION LOANS OR DOES IT ALSO COVER PRODUCTIVE LOANS ADVANCED BY BANKING AND FINANCIAL INSTITUTIONS? The Shariah clearly states that riba al-nasi'ah, â€Å"the fixing in advance a positive return on a loan as a reward for waiting† is prohibited. Hence it could be understood as a ban on interest as commonly used today. Islamic jurists, the fuqaha, state in no unclear terms that all manifestations of riba are forbidden. So it does not matter if the context is consumption or business and also whether the loan in issued or availed. It is also irrelevant whether the institution in question is a commercial bank, government agency, business enterprise or an individual. 3. DOES THE PROHIBITION OF RIBA APPLY EQUALLY TO THE LOANS OBTAINED FROM OR EXTENDED TO MUSLIMS AS WELL AS NON-MUSLIMS? The Islamic Fiqh Academy (IFA), which is the leading authority on f inancial transactions, mentions that there is no leniency in the application of Shariah laws even if one party of a financial transaction is non-Muslim. ... IS SUCH A SCHEME ACCEPTABLE FROM AN ISLAMIC POINT OF VIEW? In economies with high rates of inflation, restrictions imposed by Shariah laws can undermine value of investments. To compensate for such a loss, a method of indexation is usually employed. There is no consensus yet among the fuqaha, as to the compatibility of indexation practices with Islamic scriptures. So far the Fiqh Academy has permitted indexation in cases pertaining to â€Å"wages and contracts fulfilled over a period of time† and has disallowed in cases pertaining to monetary debts. Similarly, â€Å"for debts in a specific currency, due in installments, the parties may agree to settle the installments due in a different currency at the prevailing rate of exchange on the date of settlement†. 5. WHAT ARE THE MAJOR MODES OF FINANCING USED BY ISLAMIC BANKS AND FINANCIAL INSTITUTIONS? Islamic banking system has invented a few ingenious modes of financing in order to comply with Shariah principles. The first mode is based upon sharing of both profits and losses incurred by investments, respectively the mudarahab (passive partnership) and musharakah (active partnership). The second mode operates on the basis of credit offered durig the purchase of goods and services and uses such financial concepts as murabahah (sales contract at a profit markup), ijarah (leasing), salam and istisna (contracts). These modes are unique to Islamic finance and have been approved by fiqh officials. Apart from being consistent with Islamic precepts, these modes incentivise direct investments, thereby contributing to economic growth of the bank/institution/country. Yet, improvements need to be done in order to integrate Islamic financial system into global

Planning and Organising International Business Enterprise in Russia Essay

Planning and Organising International Business Enterprise in Russia - Essay Example Longwell also estimated that to meet the expected demand almost 80 million oil-equivalent barrels might need to be added per day and this need to be done by 2010 (Longwell, n.d.) Demand of natural gas is increasing rapidly because world is looking for more environment friendly, efficient and clean energy source. So it is quite clear that there are huge business opportunities worldwide for the oil and gas exploring companies. There are many companies dealing with oil drilling technology, but most of these companies are from USA. It is a fact that Russia is one of the leading exporters of natural gas and oil. As far as oil reserves are concerned Russia is eighth in the world but the country is holding first position in terms of natural gas reserves. Saudi Arabia, largest oil exporter in the world, is the major competitor of Russia as far as oil exporting is concerned. In the field of natural gas Canada, United States and Norway are the major competitors of Russia as they also produce and export large amount of natural gas. So it can be assessed that the upcoming firm would face international competition to great extent. Even few years back, the technical aspects of oil drilling like horizontal drilling and hydrofracs were primarily provided by western nations but today many of the Russian companies also provide the services. The geographical environment is primarily favourable to the prospective oilfields in Russia as the country has vast resources of nature like oil, coal and natural gas. Most of the oil reserves in Russia are located in the Siberian region. But various factors like climate, distance and terrain act as obstacles in the process of exploration and production of oil and natural gas in the region. As far as economic conditions are concerned in 2008 Russia’s GDP growth rate was 5.6%. Since 1998 Russia had been able to retain its average growth rate at 7%. Major portion of its GDP comes from export of oil and natural gas. Country has almost