Islamsko bankarstvo - primjena finansijskih instrumenata u praksi islamskih banaka
Islamic banking - financial instruments in banking practice

Summary/Abstract: The founding of Bosna Bank International d.d. Sarajevo (BBI), as the only bank in Bosnia and Herzegovina that will operate according to Islamic principles, is a business undertaking worthy of attention. It also represents support and encouragement to other investors from Islamic countries to make significant capital investments in the economy of our country. The operating principles of Islamic banks are unfamiliar both to the Bank's potential clients and to the institutions responsible for the supervision of banking activities. This could present a real problem for the future operations of the Bank, so that it will have to invest considerable effort in the education of the local business public on the methods and mechanisms of its activities and affairs. This paper presents the basic financial instruments used in practice by Islamic banks. The first section of the paper sets out the financial instruments used in the sector for the acquisition of funds. The second section explains the basic instruments of financing. Particular attention is paid to a consideration of the financing instruments used in practice by Iranian banks. A comparative analysis is then provided with other banks that operate in accordance with Islamic principles. It is clear from this that Islamic banks have a preference for the use of low-risk financial instruments in order to ensure stability in their operations and the protection of depositors. This is to some extent in conflict with the original theoretical approach of Islamic banking, of which the basic premise is the principle of shared risk-bearing, and as the basic financing instrument the model of 'shared distribution of profit or loss' is put forward. The paper ends, in place of a conclusion, with an account of some of the reasons that have led Islamic banks to prefer the low-risk model of financing in their business practice.

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