individuals and families whose main motive in purchasing units is to
invoke the Islamic Shari'ah in all modes of financial and trading
transactions.
In order to maximize return. and minimize loss, the bank as
the SSB Trust Fund will follow a fully diversified investment
policy which may involve using different Islamic financial instruments
such as leases, installment sales, and other variables modes of trade
financing arrangements, as well as other methods of finance which
conform to the principles of the Shari'ah. The Fund may also attempt to
spread investment across a wide range of industry or trade in different
small business units, localities, regions, and even geographical areas. The
principles of the diversification of investment are not only important for
the safety of funds, but also serve the important purpose of spreading
resources over different areas of growth, thereby avoiding concentration in
a few small-scale business units. In the beginning the Bank might not have
a wide range of options for diversification. However, with the expansion of
Islamic enterprises the opportunities and avenues of investment both in
terms of instruments and trade are expected to increase.
Mudarib of
As is the usual practice with unit trusts, profits shall be distributed
according to a fixed periodicity or interval on a prorata basis, and the bank
will be entitled to charge a fee as a `service charge'. The charges will not be
deducted from the initial investment, but rather recovered from the fund's
income over several years.
The institutionalization of Islamic savings through small-scale unit
trusts will reflect the willingness of the people to subscribe to a particular
business objective created on Islamic principles. It will also indicate the
ability of the Bank to motivate people by its performance and quality of
service. In an imperfect capital market, ICBs have to demonstrate their
ability to mobilize savings by differentiating their `products', which is very
well `branded'. This is a unit trust with a difference - a strict adherence to
the Islamic Shari'ah.
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