Types Of Financial Transactions Research Articles

Riba and interest in Islamic jurisprudence: seeking the path to consensus

Purpose The purpose of this study is to explain the opinions of the Muslim jurists available in the fiqh books so that they may be compared with the approaches adopted by modern scholars for defining the concept of riba. It is argued that the method of jurists was different from the one adopted by the modern Muslim jurists and Islamic economists. The new method dichotomizes riba into those of the Quran and Sunnah. On the contrary, jurists of four Sunni schools considered the Quran and Sunnah in this regard as a single whole, and they saw Sunnah as the elaboration of riba. By explaining the similarities shared by different fiqh schools, it is explained that there is no need for a definition of riba. Design/methodology/approach The paper uses the method of content analysis. The authors have consulted the authentic fiqh manuals of the four Sunni fiqh schools to substantiate the objectives. Findings One of the major findings of this paper is that interest charged in loan transactions, including bank loans, is riba according to the four Sunni fiqh schools. Moreover, the paper also shows that the similarities among the four Sunni fiqh schools are far more significant than the often-highlighted disagreements among them regarding the concept of riba. The methodology adopted by modern Muslim scholars seems to add confusions around the concept of riba. Research limitations/implications The paper discusses views of only four Sunni fiqh jurists. Originality/value The paper explains the common methodology followed by the jurists for understanding riba, the significant similarities resulting from their common method, the link between the concept of riba and different types of financial transactions within the framework of the jurists and that combining several fiqh schools at a time is a contradiction-ridden methodology.

Implications of Informal Money Transfer Systems on Kenya’s Financial Sector

Purpose: In Kenya, the informal money transfer system is widely used by its citizens, allowing them to make quick and easy payments across long distances. This system has bridged the gap between those with limited access to formal banking services, allowing them to make transactions without relying on a formal banking institution. While there are numerous benefits to using this type of system, it can also present potential risks to the economy and financial sector in general. This paper examines the implications of the informal money transfer system in Kenya, focusing primarily on its effects on financial sector development, financial inclusion, and risk management practices.
 Methodology: A qualitative research approach was adopted for this study to understand the complexities and nuances involved in this type of financial transaction. Secondary data was obtained from surveys conducted by government agencies such as the Central Bank of Kenya (CBK). Other sources included reports on informal money transfers such as web-based searches on informal money transfer services, and databases used by banks and other government departments related to finances. Legal and regulatory frameworks that influence the use and activities of informal money transfer systems in Kenya were also be included.
 Findings: The findings showed that informal money transfer systems provided much-needed access to finance for many individuals excluded from formal banking services, leading to increased economic development opportunities. The findings further uncovered that the drivers of informal money transfers include low-income levels, traditional banks limited geographic reach, limited capital, and a lack of trust in formal banking institutions. As such, informal money transfers aided the velocity of efficient and cheaper cross-borders and cross-regions remittances. It was however demonstrated that although informal money transfers bring benefits to their users, it also carries considerable risks.
 Recommendations: It is recommended that the current regulatory framework governing informal money transfers needs to be updated to protect consumers from fraud and theft while still allowing them to access the necessary financial resources for their economic endeavours.

Classification of financial monitoring objects: criteria and indicators of suspicion

Problem setting. The problem of legalization (laundering) of money and other property acquired by criminal means is of great importance for Ukraine, because the criminalization of the economy is the main threat to the economic security of the state. In order to successfully combat this negative phenomenon, it is necessary to constantly develop and improve the processes of identification and analysis of financial transactions that are the objects of financial monitoring. Detection of such transactions requires clear criteria and indicators that allow you to quickly and accurately identify among the range of financial transactions those related to money laundering. The list of criteria and indicators of suspicion of financial transactions is large and sometimes ambiguous in terms of its interpretation and application. This issues is important because it is about the scope of law, the subjective rights of participants in financial transactions, the ownership of such persons in their assets and the level of trust in entities that provide financial and other services. The purpose of the research is to study the legal norms in the field of establishment and classification of financial monitoring objects – types of financial transactions depending on the criteria and indicators developed by the subjects of state financial monitoring and supplemented by the subjects of primary financial monitoring. Analysis of resent researches and publications. The solution of problems of legal regulation of the national system of financial monitoring in Ukraine (procedures, methods, risks, criteria, indicators etc.) was devoted to the works of such scientists as A. P. Gavrilishyn, I. M. Patyuta, B. M. Surkalo, O. E. Kostyuchenko, K. A. Kryvulya, Zh. I. Dovgan, I. G. Biryukova, V. M. Berizko and others. However, the issue of classifying financial monitoring objects according to the criteria and indicators of suspicion is important and necessary, because it is on such indicators that all activities in the field of financial monitoring are based and the results of such activities depend on their establishment. Article’s main body. The list of criteria and indicators of suspicion of financial transactions and their classification as objects of financial monitoring is quite wide. Their classification according to the relevant criteria is necessary and enshrined in law, which is important to prevent their unrestricted spread. At the same time, the subjects of state financial monitoring at their own discretion, but taking into account the main requirements of the legislation in the field of financial monitoring, develop and establish the grounds for classifying a financial transaction as an object of financial monitoring. In turn, the subjects of primary financial monitoring at their own discretion, but taking into account the rules and subjects of state financial monitoring, supplement, expand and improve this list in order, on the one hand, to prevent the legalization (laundering) of proceeds from illegal by and their entry into the financial system of the state and, on the other hand, compliance with the subjective rights of customers – participants in financial transactions. Conclusions. The article examines the legal norms in the field of establishment and classification of financial monitoring objects – types of financial transactions depending on the criteria and indicators developed by the subjects of state financial monitoring and supplemented by the subjects of primary financial monitoring. It is concluded that the identification of transactions that are the objects of financial monitoring requires clear criteria and indicators that allow you to quickly and accurately identify among the range of financial transactions those related to money laundering. Risk criteria by type of client, by geographical basis, by type of service (product), by service supply channel (product) are considered. Differentiated indicators of suspicion of financial transactions into indicators related to the activities or behavior of the client, indicators related to the financial operations of the client and indicators for different types of products (services). It is emphasized that the problem of defining clear and standard types of criteria and indicators of financial transactions is important and relevant in the current relations in the field of financial monitoring between the state and the participants of the respective financial transactions.

The Islamic Microfinance System And Its Ultimate Impact On The Poor In Bauchi Metropolis In The Context Of Socio-Economic Challenges

One of the conditions for providing social services to the population, reducing the differentiation of their incomes, as well as reducing poverty is to provide equal access to financial services for all segments of the population. Despite high unemployment and a significant number of poor people, only about a few thousand Nigerians today use Islamic microfinance services. The main purpose of this study is to study the impact of the Islamic microfinance system on the financial situation of the population. The study is based on the principles of the theory of positivism. Methods of deduction, statistical analysis, and survey served as methodological tools. The authors of the article developed a structured questionnaire, the analysis of which allowed to analyze the attitude of citizens to Islamic microfinance services. A representative sample of citizens of the metropolis Bauchi with different levels of wealth, age and gender was selected for the study. According to the results of the survey, the development of special microcredit programs for low-income people allowed to finance the start of their own business, thus providing their own and household members’ employment. The main factors hindering the development of microfinance in Muslim countries are the high level of non-repayment of borrowed funds, imperfect infrastructure, the presence of Sharia bans on certain types of financial transactions. The results of the study showed the need for an active information campaign aimed at explaining the benefits of using macro-financial services and their accessibility for low-income citizens, as well as expanding the network of microfinance institutions throughout the metropolis. These measures will create conditions for the development of small business in the country, and as a consequence reduce poverty and reduce the number of unemployed in the country.

RISK-ORIENTED APPROACH IN THE PRIMARY FINANCIAL MONITORING BY BANKS

The ongoing changes in the legal regulations for banks to conduct financial monitoring make the research on the risk-oriented approach implementation in the Ukrainian banking sector relevant. The declining share of information bearing the signs of internal financial monitoring in the total amount of information provided by banks highlights the need to further improve the methods used to assess suspicious financial transactions conducted by banks and the risks associated with them, given the effectiveness of their detection and depth of consequences. The article is aimed to improve the risk-oriented approach in the primary financial monitoring by banks through the substantiated elements composing the system of significant risks associated with money laundering and terrorist financing. While substantiating the elements composing the system of significant risks associated with money laundering and terrorist financing, it is crucial to consider the international risk management standards based on the assessment of threats, vulnerability to threats and their consequences for the bank and national security at all levels. Implementing the following steps: threat identification considering the type and jurisdiction of customers and types of financial transactions and channels for their implementation, justification of banks’ vulnerability to middle and high level threats, significant consequences of money laundering and terrorist financing risks allowed presenting in detail the areas of interest for the bank risk management. The research determined financial transactions subject to the recommendation to use high, increased and traditional prudence while identifying and verifying transactions. The proposed banks’ prudence areas built in reliance on the analysis of the legal framework for combating money laundering and terrorist financing, statistics provided by the State Financial Monitoring Service and the NBU allow banking institutions to focus on the risks posed by money laundering and terrorist financing, which have a significant impact on their activities. Further research should focus on forming a mathematical tool for assessing the bank’s risks in the financial monitoring of money laundering and terrorist financing.

Dju dilidžens misija

Due Diligence represents a detailed analysis of a selected company, especially regarding its overall financial and operational business performance. In spite of the growing availability of information on the internet, there is a need to get insight into the operations of companies directly and on the spot. The company's business analyses must be very comprehensive and take into account all the known risks. The aim of the mission is for the head of Due Diligence activities to review, verify and confirm the previously collected knowledge, information and data about the company. Particularly active in commissioning Due Diligence are the companies initiating and arranging the following types of financial transactions: mergers and acquisitions, collection of funds for further investment, overcoming insolvency, joint ventures, tender procedures, as well as some other types of engagements.

VAT Implications of Islamic Financing – A South African Perspective

Islamic financing is growing fast during the last years. Conventional (“Western”) taxation systems have not necessarily caught up with the numerous specific features of the Islamic finance market, creating a situation that, in many non-Islamic jurisdictions where tax laws and regulations are not adapted to Islamic forms of finance, Western and Islamic financing do not operate on a level playing field. In this article, the author explains how South Africa has amended its VAT legislation to ensure that the two types of financial transactions are treated equally for VAT purposes.

Design and Implementation of a Mobile Transactions Client System: Secure UICC Mobile Wallet

This paper describes our concept, design and current implementation of the Secure Mobile Wallet. Mobile Wallet is an application stored in mobile phones providing to subscribers the possibility to perform various mobile financial transactions. In our approach Secure Mobile Wallet is stored and running in the Javacard SIM chip, called UICC module. The Wallet comprises several Javacard applets supporting several types of financial transactions – mobile banking, mobile payments, mobile commerce, mobile micro–loans, mobile ticketing, and mobile promotions. Secure Mobile Wallet supports over–the-air (OTA) transactions based on SMS, GPRS, or mobile Internet protocols and also over–the–counter (OTC) transactions based on NFC or Bluetooth protocols. Users, messages and data stored in the Secure Mobile Wallet are managed and maintained using both, OTA and OTC, protocols. Security is supported by Integrated Security Platform, which is a separate application providing security services to other applications. Integrated Security Platform is the implementation of USSM concept, specified by ETSI. As a client’s application, Secure Mobile Wallet is integrated into our larger, secure mobile transactions system.

Trust and Insurance Markets1

Trust is a key determinants of any financial transaction. Exchanges in insurance markets are a particular type of financial transaction where a current payment – the premium – is exchanged for a promise of a future, contingent payment – the indemnity due when the casualty occurs. We argue that trust is key in fostering these type of exchanges. Trust enters two ways: it affects the willingness of the company to supply insurance when the insured can cheat by claiming indemnities that are not due; it discourages people from purchasing insurance if they do not trust the company promise of readily paying the indemnity when due. We prove theoretically and empirically the relevance of trust in insurance exchanges and discuss policies to foster it.

A perspective on financial market reform

In response to a nationwide decline in U.S. house prices that had significant repercussions for the U.S. and global financial markets, many countries are considering a wide variety of financial market reforms. Most of the proposed reforms include the establishment of new governmental agencies to regulate banks and other financial institutions and/or to prohibit or restrict certain types of financial transactions. I offer several guiding principles for financial reform and suggest the types of reforms that are likely to generate the best results based on these principles. Finally, I discuss the role that the central bank can play in mitigating the size, duration, and effects of financial crises. While the analysis draws heavily on the U.S. experience, I believe that the implications apply globally.

Look! Up in the Sky! It’s a Bird … It’s a Plane … It’s the Tobin Tax! Is a Global Financial Transactions Tax the World’s Next Economic Superhero?

Like the classic superheroes, a Tobin Tax has been suggested as a solution for any number of problems. In the Tobin Tax context these problems range from currency speculation (the original issue) to financial market volatility. However, a tax is only one of many options for controlling market volatility and other kinds of economic risks. Choosing the appropriate method from among the many requires a careful evaluation of economic realities as well as the capabilities and limitations of each method. For example, in the modern global economy, local financial actions have global ramifications, often in unexpected places and in unexpected ways. Yet, current risk management techniques remain primarily national. This is partly because of existing legal regimes and partly because of administrative challenges in implementing even a regional risk management infrastructure. A Tobin Tax is rumored to be able to overcome those challenges and apply broadly across differing legal regimes. At heart, a Tobin Tax is a type of financial transactions tax (FTT) – it is essentially a tax levied on one or more of many types of non-banking financial transactions. To many academics and, lately, politicians, it is a magic bullet for all manner of financial monsters. To others, it is an unwieldy, dangerous, and impractical product of ivory tower thinkers. Nonetheless, the idea has consistently gained traction in the aftermath of late-twentieth, and now early-twenty-first, century financial crises. Of course, everyone wants to avoid financial crises. But, the question is: will a FTT do that? And, even if it might, somehow, help prevent a crisis, is it a good idea to use such a tax to accomplish that goal? This paper will investigate each of these questions in the context of the 2008-2009 financial crisis.

Supporting factoring transactions in Brazil using reasoning maps: a language-based DSS for evaluating accounts receivable

Factoring companies are a widespread way of providing working capital to small enterprises in Brazil. This type of financial transaction has higher risks when performed in developing countries, due to unreliable financial information on firms, an unstable environment, and particular managerial practices. This paper describes a case study in which a language-based DSS was developed for a Brazilian factoring company to evaluate the perceived risk of buying accounts receivable; and discusses the suitability of different approaches to decision support for this type of decision in Brazil—which may be relevant for similar situations in other developing countries.

Ocena inwestycji na Warszawskiej Giełdzie Towarowej w okresie od stycznia 2002 roku do lipca 2004 roku

Nowadays the commodity exchange offers not only a wide range of operations such as trade in commodities but also future contracts and other types of financial transactions. While at the stock exchange one can encounter mainly shares, the commodity exchange epitomizes an impressive variety of negotiable units. Mutual funds and deposits, which are an alternative way of investing, also play a relevant role on the financial market. From economical point of view deposits are burdened with the smallest risk. According to the modem financial theory, the attitude towards a risk is considered as a very important aspect of the situation on the market. Not only behaviour of the investors but also political and economical events determine the situation on the market. The. behaviour of the investors is analysed by the cognitive psychology, which is associated with a new behavioural current in financial theory, which is called the behaviour finance. The aim of this paper is to check, if it is worth to invest at the commodity exchange. The analysis is carried out on the basis of the data from Warsaw Commodity Exchange in the span of3 years: 2002-2004.

Panel Discussion on the Teaching of Money and Banking

To discuss what's right and wrong with the teaching of contemporary money-andbanking courses, we must first distinguish the various species of courses that fall under the M&B genus. In economics departments, the undergraduate M&B course is conceived prototypically in either of two ways: (1) as a basic macroeconomics course, including in principle (though often not in practice) an introductory swipe at international finance, or (2) as a policy course focusing on the art of central banking, including an obligatory introduction to opportunities for intervention in foreign-exchange markets. For convenience, let's call these alternative course conceptions (M&B)1 and (M&B)2, respectively. In business-school finance departments, M&B courses seek primarily to explain how contemporary financial markets and institutions work. These courses develop analytical descriptions of different types of financial transactions, instruments, transactors (with special emphasis on the roles played by intermediaries, dealers, and brokers), and contract terms (with special focus on implicit and explicit yields). Whereas MBA-level offerings are of negligible importance to the typical economics department, they represent a sizeable portion of the finance-department M&B market. Undergraduate M&B courses in finance departments–(M&B)3–differ from MBA-level ones–(M&B)–in assuming that students possess little background or interest in macroeconomic theory per se. (M&B)4 courses shape up as a linear combination of (M&B)3 and either or both (M&B)1 and (M&B)2.