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Showing posts from October 5, 2010

Accounting Policies and Procedures

Mobilisation of funds and employment of funds
Mobilisation of funds has to do with the acceptance of deposits. Islamic banks in this sense are not that
different from conventional banks. They accept depositors’ funds and the recording of those deposits
from an accounting point of does not differ that much from conventional banks. We have current
accounts, then we have savings accounts, which can be different types, A and B, depending on the time
and if they are short term or long term. Then we have investment accounts, which are going to be used
for a specific investment. Finally, we have joint accounts, where discretion is given to the bank to use
those funds wherever they want, in any type of investments.
Clearly, the recording of the accounting transaction is not that different from what we have been already
used to in conventional banking. The only difference is that Islamic banks are required to keep certain
transactions separate because there will be a problem at the end as to h…