A common accounting standard in Islamic banking and finance has been a critical issue to ascertain the profit of various investors at any given time, because; in the banking industry deposits and withdrawals are unexpected, while deploying any fund at specific time period is required for profit. To overcome such a complex situation of the calculation of profit, Taqwa Multi State Credit Cooperative Society Ltd (Taqwa) to ascertain the profit of every investor/depositor as at any given time, will follow the “Unit Value” system.
The “Unit Value is a basis to ascertain profit on an investment at any selected time scientifically.” As the
unit system is being used by ‘Taqwa’, the word ‘Unit’ is used in place of the base currency in India (INR)
as; 1 Unit = 1 Rs to be applied for any selected product with Taqwa, for example:
Suppose Taqwa receives Rs 1,00,00,000 under Fixed Deposit for Investment from various depositors within a
month at different level of times. Thus, the above amount will be converted into 1,00,00,000 units of Rs 1
each value (i.e. 1 Unit = 1 Rs).
Now, let us assume Mr. X invested Rs 50,000 i.e. 50,000 units and the ratio of profit/loss sharing as agreed
between Taqwa and Mr. X is 75:25 respectively, based on the principles of “Mudaraba”.
One month after investment the profit is received at 12% raising the total investment sums to Rs
1,01,00,000. The value of 1 “unit” after the period of one month calculated will therefore be:
1,01,00,000/1,00,00,000 = Current Unit Value, that comes to Rs 1.0100 in this example:
Therefore, the proportionate share of Mr. X in profit will be:
| Number of units held by Mr. X i.e. | = 50,000 |
| Current value of above units Rs 1.01 will be | |
| (Units 50,000 x Rs 1.01) | = Rs 50,500 |
| Initial amount invested by Mr. X | = Rs 50,000 |
| Total profit earned on above investment | = Rs 500 |
| Less Taqwa share profit at 25% | = Rs 125 (-) |
| Net Profit to Mr. X is | = Rs 375 |
Taqwa will apply the same procedure of the “Unit Value” to the required product for all their subsequent calculation, as this will make assessment of profit/loss simple and easy despite the complications of withdrawals and fresh investment at different periods of time and every depositor/ investor will be able to trace profit on his/her investment at any selected time, scientifically.
Taqwa CCS Ltd Profit Level 2020
| 2021 | Fixed Deposit | Ghina Fixed Deposit | Share Value | Mutual Fund (0% - 2%) | Capital Gain Plus (0% - 5%) | Interim Service Cost |
|---|---|---|---|---|---|---|
| Months | Unit Rs | Unit Rs | Unit Rs | Profit | Profit | Rate - Bhatkal Branch (p.a) |
| April | 1= 1.041 | 1= 1.0175 | 1= 0.3579 | 0.75% | 1.00% | 1.84 |
| March | 1= 1.0363 | 1= 1.0155 | 1= 0.3552 | 0% | 0% | 1.75 |
| February | 1= 1.0317 | 1= 1.0135 | 1= 0.1635 | 0.75% | 1.00% | 1.82 |
| January | 1= 1.0273 | 1= 1.0116 | 1= 0.1677 | 0% | 0% | 1.84 |
