Characteristic and Objectives of Islamic Banking in Sudan

Sudan Vision

Khartoum -The main characteristic and objectives of Sudanese Islamic banking system was revolve around sex elements which are explained in the following:
Firstly, Islamic finance involves a system of equity sharing and stake-taking. It works by the principle of a variable return depending on the real productivity and how well the project performs. Therefore, Islamic principle remains of equity, reward and risk sharing unlike the conventional concept. Secondly, Sudanese Islamic banking plays important role in the economy, which is to an extent a revolutionary development as it calls for new approach to the economy. Islam needs the economy; it’s most important monetary and business dealings, to change away from debt-based partnership to an equity based and stake taking relationship.
While the  some debt-based transactions will still exist in the Islamic bank but it will be based on the principle of ‘Quard Hason’ (take for special case for specific reason and guaranteed by equal amount deposited in investment account. e. g. if some company deposit large amount in investment account for one year and after 8 months need some amount for two months, then will take Quard Hasan for two months based on deposit amount in the investment account because it enable the company to gain the profit for this amount for two months which it can be provide the balance of investment account as guarantee to the bank). The overall purpose of the economy will be arranged towards equity based and risk sharing. Thirdly, in the Islamic mode ethics will play a key role. The ethical and social size will be essential to all economic activities, there will exist structure of ‘Halal’ (permissible) and ‘Haram’ (prohibited) within which all economic activity, private and public, has to be taken in place. The ethical issue will work at different levels and therefore morals will effect to the conscience of the entrepreneur and the firm, the society, the legal structure and the supervisory of the state.
However, Islamic banks activities which would be treated the capitalist in Halal productivity and avoid gambling, prostitution, the promotion of alcohol, and any Haram productivity. Therefore social and ethical will be part of the Islamic economic system, and then all bank transaction will be made based on Shariha law and Islamic norms. Fifthly, the government of Sudan encourage the Islamic banking is entrepreneurial driven to directed for all not just towards financial expansion but also towards physical expansion of economic production and services. In the Islamic economy money will not produce money; it is expected to finance talent, innovation and new ideas, skills and opportunities. Whereas, conventional banking operates predominantly on the basis of financial collateral, therefore the more money you have, the more you can get. This means that the viability of a project mainly depends on the financial worth of the borrower; meaning that low collateral can reduce the chance of getting a loan, even if the project is viable and the person has impeccable character. Whereas, in the Islamic system collateral is not ignored but it is reduced, through the trustworthiness of the person, the viability and usefulness of the project; which is more important than the financial worth of the borrower.
This means in the Islamic system greater emphasise is placed on human needs such as fair distribution, equity, community and individual development. Therefore, Islamic banking is more oriented towards the community, talent and entrepreneurship in Sudan to improve the individual income as specific objective and develops GDP as general objective. Finally, the Islamic system is non-inflationary; this is a very important and fundamental aspect of Islamic banking because the rate of inflation in Sudan slightly stable during last twenty years based on developed banking sector. The linkage between financial expansion, money supply and the physical expansion of the economy is a result of the financial and banking dynamics of the current time, however, the Islamic banking and finance restores the balance between these three variables. Stability in the value of money is a primary goal of an Islamic economy. Therefore all economic sectors are developed because Islamic banking helps to allocate resources between all sectors. Finally, provide financial services such as open accounts, transfer money, collecting checks, deposit and debit, and etc to the customers.

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