Cost Accounting Raises Islamic Bank Efficiency

Bandar Seri Begawan – Continuous study on the cost and profitability of every operation and customer heightens the efficiency of Islamic banks.

This can be achieved through a modern method of standard cost accounting that enables the analysis of profitability of every operation before it is commenced.

An independent consultant on Islamic Banking, Finance and Economics, Mr. Monzer Kahf underlined these issues in his talks on factors of success of Islamic banks yesterday.

He said that the profitability of every customer can also be analyzed by bringing together the results of a customer's operations.

Apart from banking efficiency, other factors that contribute to the success include the high level of trust.

“The reputation of management and founders is an issue that does not need re-emphasis.

“It is evident that trust is the first foundation for the success of any bank,” he said.

According to Mr Monzer Kahf, what every Islamic bank requires today is real and effective supervision on the implementation of standards and collective religious rulings in their actual deals and transactions with others, including customers, depositors and shareholders as well as effective Shariah supervision on innovations by the financial engineering department.

Other factors discussed were efficiency of investment, financial engineering and marketing departments, preservation of bank's and customer's assets and providing humanitarian and social services. -- Courtesy of Radio Television Brunei 

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