How the segregation of funds related to the Islamic assets is ensured by these banks?
The segregation of funds related to the Islamic assets is not a problem at all as their accounts are maintained separately from those of the other assets of the bank. Similarly the funds raised by the bank in Islamic mode are treated as separate portfolios held by the bank in trust for its customers. The float derived by the bank from funds flows of amanah accounts can be invested in Islamically approved assets (e.g. avoiding interest, alcohol, gambling, etc.) and the profit derived from such investment could be shared with the depositor in the manner decided by the bank or merged with the other profits of the bank. For operational purposes the Islamic banking window will use the bank’s existing fixed assets and infrastructure. For this the Islamic window can remunerate the bank by means of a fixed annual fee which can be pro rated and charged to the Islamic investment accounts. Apart from the service fee above, the bank takes a share of the profits earned by the funds generated by the
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