An Islamic bank works on the basis of risk sharing without interest. The customer and the bank share the risk if any, proportionate to the investment and profit/loss is divided accordingly.
Murabaha:
It is a sale of a commodity either on cash or credit at a profit. Murabaha
refers to a sale, where the seller discloses the cost of the commodity and
amount of profit charged.
Mudaraba: A form of partnership where Party A provides the funds, while the
other Party B provides expertise (as a working partner). The profit-sharing
ratio is determined at the time of entering into the Mudaraba agreement. In case
of loss, it is to be borne by the investor (Party A) and the working partner
(Party B) is fully exempted to share any losses.
Istisna’a: It is generally a long-term contract whereby a Party A (Taqwa)
undertakes to manufacture, build or construct assets, with an obligation from
the manufacturer to deliver them to the customer (Party B) upon completion.
Ijarah: To give an asset on rent or lease for the use of it, at a specific future
period of time.
Wakala: It means an agency or a delegated authority appoints the Wakil (agent)
to carry out a specific job/business on behalf of the Muwakkil (Taqwa).
Musharaka: It is a joint partnership structure, in which, partners share the
profits and losses of the enterprise proportionate to their investments.
Qarz-e-Hasna: It is a form of interest free finance advanced for a specific
period of time.
Dain: It is a sum of money that is owed to someone else (debt).
Sukuk Bond: It is an Islamic bond, structured in such a way so as to generate
returns to investors without infringing Islamic law (that prohibits Riba or
interest). Sukuk represents undivided shares in the ownership of tangible assets
relating to particular projects or special investment activity.
Rahn: It is a promise for pledging as asset as security for fulfilment of
obligation. In case of not honouring the obligation, it would give the right to
recourse the debt against the security.
There are many other Shari’a terms such as; Bai-Salam, Wadal-Bai, Musawamah,
Tawarruq, etc., that may be used by Taqwa as and when needed.
Taqwa is an Islamic Banking Model or alternative banking model (based on Shari’a principles) while, traditional banking system is based on “Riba” (interest) forbidden in Islam. The funds accepted as deposits from public are carefully deployed in finance schemes covered by risk management. Thus, the funds with Taqwa are not the subject of being lost. The profit earned from customers is very close to the market. In an investment, the variations between the profit and loss are very wider and the investors may lose their funds with investment companies at any point of time.
The major differentiating factor between their operations is without Interest. However, Islamic banking system operates based on profit and loss which is the perfect mode of investment.
Yes, before the end of December every year. Please refer our DOWNLOADS menu.
Real estates, Commercial projects and at various financing sectors.
All Taqwa financing and investment schemes are covered under mortgaged or securitized by all borrowers’ assets kept as securities before any finance is granted. Thus, the risk on customer fund is negligible.
No, Taqwa is registered under Registrar of Cooperative Society (RCS Act of Karnataka1959/60), since Islamic Banking cannot be operated under RBI platform.
The first step is to open a saving account with Taqwa so as to maintain an account relationship with them at least for 0-6 months to avail a facility. Let the customer and Taqwa be familiarized with each other.
Yes, in addition to the mortgage of an asset, one guarantor is required and the customer has to convince Financial services officer about repayment ability.
A copy of identification – A copy of Passport or Aadhaar card or Voter's ID card and a copy of PAN card - Three copies of the latest passport size photographs.
The Society uses the funds in financing to the members and investments as per the societies act/rules/by-laws. Our financing is in the shape Gold Mortgage Finance, Auto Finance, Micro Finance and many others.
Yes, because Government of India has framed the laws/rules to ensure the security and safety of deposits and Taqwa Credit Cooperative Society strictly abides by the rules and regulations framed by State Government. The State Co-Operative Societies Act.
i. Banks
works as per the rules of Reserve Bank of India while Society works as per the
Cooperative society Act.
ii. Audit of Bank is done by the panel of C.A. or R.B.I. officers as per the
guideline of Reserve Bank of India, while in society auditors came from the
registrar office of co-op. for audit.
iii. Banks can issue cheque books because they have clearing house license,
while society don't have clearing house license so can't issue cheque books
iv. When anybody wants to do transaction with society first of all he/she has to
become member of society & have to purchase the shares of it than & than can
take loan & put deposit in society. While in Banks without become member &
purchase the shares you can take loan & also put FD & other deposit.
The loans are fully secured with collateral security and is given to genuine borrowers after full scrutiny and due diligence. Cooperative society shall not make loan against the security of shares of members or on the security of non-members.
Cooperative society may raise deposits, funds etc from the members to the extent that the total amount of deposits & loans should not be more than 10 times capital and accumulated reserves of the society.
Income earned by the society from loans & advances is exempted from Income Tax. Therefore, the society saves huge amount of money which otherwise would have been paid as taxes. This helps the society in keeping higher profit on deposits.
Society is not a personal institution owned by an individual but is a fully
democratic organization managed by Board of Directors who are elected by the
members of the society in the Annual General Meetings and the Board of Directors
also take decisions in a collective manner with total transparency. The
department of Co-Operatives constantly reviews the functioning of the society at
regular intervals.
Finance companies are usually owned by individuals and frame the so-called
policies according to the whims and fancies of the owners. The general members/
depositors/ Investors have no role to play. There are some possibilities for the
absence of transparency. Members/ Investors have virtually no knowledge of the
affairs/ legal provisions of N.B.F.C’s and the statutory liabilities of the
N.B.F.C’s are also limited.
Taqwa Credit Cooperative Society is completely live to its legal liabilities and
answerable to its members through its elected members of the Board of Directors.
Books of accounts of Taqwa Credit Cooperative Society subject matter of
Statutory Audit and the Audited Accounts are submitted to State government of
Karnataka for review and further action, annually. When you invest your money in
Taqwa, you are not only an investor you are a member of the society.
We believe in the principle of encouraging saving habits amongst our members. In the present context when tendency to save is on the decline and the consumerism is on the high, we want to ensure the financial and social well-being of our members as a moral responsibility towards the Society. As a true nationalist we are convinced that higher the savings, higher the investment and better the G.D.P.
All those investors/depositors who are keen to get better returns/profit on their deposits in short term, medium term and long term. So, all of you are welcome.
Yes, in addition to the mortgage of an asset, one guarantor is required and the customer has to convince Financial services officer about repayment ability.
A copy of identification – A copy of Passport or Aadhaar card or Voter's ID card and a copy of PAN card - Three copies of the latest passport size photographs.
The entire Islamic Banking model of Taqwa is based on the book “A Practical Model of Islamic Banking” authored by Dr. Mohamed Sayeed Shingeri MBA, Ph.D. USA. This book has been approved by the world scholars; Hazrat Moulana Abul Hasan Ali Nadwi (RA) and Hazrath Moulana Qazi Mujahidul Islam Al Qasimi (RA) and other specialized Jurists of India. The current Shari’a Board members of Financial services are renowned Islamic Scholars of India, namely; Hazrath Moulana Khalid Saifullah Rahmani, Hazrat Moulana Atique Ahmed Bastwai, Hazrath Moulana Farooq Qazi and other Regional Scholars.
Yes, we have exerted our efforts in this direction to be 100% Shari’a compliant. However, shortcoming if any is found from Shari’a perspective, Taqwa will appreciate correction(s) after due scrutiny and they will compensate to the incumbent with a minimum Rs 1,000/- up to maximum Rs 5,00,000/- with a certificate as reward of appreciation that will be decided by the Board of Directors of Taqwa Credit Cooperative Society Ltd.
Deposit Schemes: Saving Accounts, Current Accounts, Tawfeer Accounts (Pygmy), Fixed Deposits, Ghina Fixed Deposits, Wakala Deposits, Gold Savings Account, Taqwa Mutual Funds, Capital Gain Plus, Noor Basic Income Accounts. Finance Schemes: Auto Finance, Gold Mortgage Finance, Gold Purchase Finance, Property Finance, Commodity Finance, Lease Finance, Hire Finance, Project Finance, Temporary Overdraft, Micro-finance and Call Finance.
The alternative model of gold mortgage finance involves two independent Shari’a contracts of which, the first one is Safekeeping operated based on “Ijara” and the second one is the finance granted to borrower based on “Rahn” (Pledge).
Digital Banking - Online Banking - Mobile Banking – Safekeeping - Pass book - Cheque book – RTGS - NEFT, PAN Card, E-Stamps, Digital Signatures, ATM withdrawal facility etc. ATM Card and Islamic Credit Card are under process.
Profit: It is the sum of
money added on top of the cost of the product/service. Profits have to be earned
by active participation in economic activity. Profit is uncertain.
Interest: Interest on the other hand is usually added not to a cost of a product
but to an amount lent to a customer. Interest is gained passively, without
participation of lenders’ business or production. In interest, return of payment
is ensured.
It is a method of identifying actual cost of branch through allocation of real overhead expenses of it on a proportionate basis. This cost is justifiably charged to borrowers, who have taken the “Temporary Overdraft” facility.
Traditional Banking system is based on hard lending in which borrower is suppressed by the burden of interest in case of financial difficulties whereas, Financial services system is based on soft lending in which the borrower is protected in case of financial difficulties.
No, any private and investment companies cannot accept deposits or investment from public, unless “No Objection Certificate” (NOC) is issued from Reserve Bank of India.
