Tuesday, September 18, 2012

What to Consider About Your Car Insurance Rate

One of the many mistakes people usually makes when they are trying to find and or buying car insurance is that they mostly aim for the cheapest and or lowest car insurance rates. While indeed it is true that your vehicle insurance rate is all that important because it affects the total amount of your insurance payment, it also is truer that you need to make the best choice when it comes to choose your car insurance rates.

The mistake people have been making in this case is due to the fact that insurance rate may have anything to do with the very protection services you are about to purchase. Thus, the more protection services you want to have for your car, the higher your insurance rate might have become.

With this consideration, what you need to do when buying your car insurance is becoming reasonable. See to it yourself that your insurance rate does reflect the very services you are now buying to protect your car. With this way of selecting, sure it is that you could get the best kind of insurance services with the best kind of payment method to give the best kind of protection to your own vehicle.

Monday, July 16, 2012

Introduction to Islamic Banking

The most distinguishing feature of the Islamic economic system is the prohibition of interest. Islamic economic principles have prominently been applied in financial industry especially in banking. Islamic Finance is growing in multiple dimensions and is now spreading in other financial sectors like insurance, structured finance, project finance, mutual funds, syndicated finance, investment banking etc. On the geographical level too, Islamic banking has grown from Middle East to Europe and now is well positioned in South Asian markets as well.

Shariah compliance also ensures Corporate Social Responsibility (CSR) and ethical compliance. Islamic banks do not conduct business with companies producing tobacco, alcohol or engaged in business of gambling, casino, nightclubs, prostitution etc. This mechanism has given Islamic banking the name of 'ethical banking' in Europe.

The balance sheet of Islamic banks is capable of taking financial shocks. Islamic banks are not obliged to give fixed return to their depositors and general creditors. The creditors, shareholders and depositors share and participate in the bank's business. Therefore, if incase, there is a shock on asset side (NPL increasing), Islamic banks will be able to share this loss with their depositors and shareholders.

Islamic banks cannot rollover loans. Therefore, the packaging and repackaging of loans and then issuing more and more debt securities on the back of these non performing loans cannot legally happen in Islamic Banks. Islamic banks are obliged to have backing of assets in all their investments. Therefore, Islamic banks losses even theoretically cannot go beyond the value of the real asset.