Professional Documents
Culture Documents
The accounting system followed by Faysal Islamic Bank is completely tailored to its own individual needs and to the needs of modern banking. Accounting system has been designed not only to record post facto information but also to cope with the needs of forward- looking decision making. A good information system should be capable of generating all information for planning, organizing and controlling the activities of an organization from a common database.
COSTING
Quite clearly no meaningful plan can be established without the fullest possible information. An efficient costing system is needed so that the cost of different services and of running different parts of the system can be established as precisely as possible. Accuracy of accounts is desirable and essential for the success of the Bank. Bank neither buys nor sells goods and commodities. It renders certain services to his constituents, the cost of which it finds out in order to see whether or not a certain customer account is a paying one.
matter of accounting, and therefore, this department has been placed under a competent senior officer of the Bank.
BAD DEBTS
Multan branch does not have any bad debts. Accounts Department has, however, created a general provision for bad debts.
CURRENT ACCOUNTS
Under the Islamic financial system as governed by the glorious Sharias, clients wishing to deposit funds with an Islamic financial institution and seeking their guaranteed return do not receive any income or benefit. Such funds are indicated as current accounts and Bank treat these as loans from the customer to the Islamic financial institution repayable on first demand. Bank chooses to make use of such funds for investment purpose on its own risk. Current account funds are treated as the Banks liability and are reported above the line in the Banks balance sheet.
DEPOSITS ACCOUNT
An investor can deposit his amount in the Deposit Account in FBL if he wants to receive benefits, if accruing, from the investment of his funds. The depositor assumes all the risks inherent in the investment of such funds. Faysal Islamic Bank guarantees the return of the principal only not profit. Only in the case of gross negligence on the part of the Bank, which is proved as such, the Bank is liable for making good losses incurred owing to such proved gross negligence.
ACCOUNTING CONVENTIONS
Bank record of savings accounts shows all deposits, withdrawals, and dilly balance in account. Rank record of current accounts shows all deposits and withdrawals.