Invasion of Privacy

It refers to the interference in one's personal life without the consent of the receiver. Interference or intrusion in one's sensitive matters without the consent of the receiver invades the privacy of that individual and hence is undesirable and unethical. Prior permission and authorization is necessary to use one's proprietary data, personal records, highly personal information etc.

Example:

• Asking about age, martial status and income of an individual in an interview or survey


• Asking about personal phone number of the respondent.


• Disclosing confidential information about the person without his consent.

Features of Modern Economic Market

Following are the salient features of the Modern Economic Markets.

Flow of Information:

Modern Economic markets are highly informed. The flow of information is uninterrupted in modern markets. Buyers and sellers have choice about the products they want to buy. Hence, they can make informed decisions which are likely to be economically beneficial to both buyers and sellers.

Modes of Payment:

Modern Economic markets have a full array of instruments for payment and collection. Pay order, Traveler Cheques, Demand Draft, LCs etc ensure that trade can take place without any barrier between extreme frontiers of the world.

Modes of Transaction:

Physical meeting of buyer and sellers in the market is no longer a requirement for transaction. Electronic markets equipped with necessary technical infrastructure enable people to conduct business virtually over a telephone line, Internet, Extranet etc.

Fraud

Fraud has been defined as" The intentional mis-representation by one party to a contract of a material existing fact which is relied upon by the other party to have or his injury is fraud'

Element of fraud include:

1. A mis-statement made with the intention to deceive.


2. The mis-representation of a material existing fact.


3. The deceived person justified in relaying on the statement.


4. This person was damaged (in the legal sense) by the false statement.

Defamation

Defamation has been defined as " the unconsented and unprivileged" of a false and malicious statement which tends to Enjure one's, character, fame or reputation". Slander is a kind of oral defamation, whereas a libel is a kind of written defamation. In a defamation suit, truth is always considered as a defence but there are exceptions too. Similarly, some false statements may be either absolutely privileged or conditionally privileged. It is so because the words "Publication" and Privileged" have important legal significance. The legality of these words must be clearly understood.

Qualities of Good Businessman

A businessman must possess certain qualities if he has to stay in the market, no matter, how much capital or funds he owns. According to economist a business is survived if the input of four factors of production, viz, land labor, capital, and entrepreneur are in the best possible proportion. However, in discussing the qualities of a good businessman we will concentrate only on entrepreneur leaving other factors. The reason is that the successful use of land, labor, and capital wholly depends on the entrepreneur who is the organizer of the business. He must be creative, ambitious, able to work under pressure. He must possess risk-assuming courage. Not only should he satisfy his customer, shareholders,and employees but also he has to deal successfully with suppliers competitors, and the government.

Chamber of Commerce

Definition:

The first Chamber of Commerce was established in 1599 in Marcelle, Italy and in Pakistan it came into being in 1984.

Chamber of commerce is an association of business that safeguards the interest of its members. It may be established voluntarily by the private sector or under the patronage of the government. London Chamber of Commerce is well-known businessman's association which is established in the private sector. It, in addition to traditional functions, offers business and commercial courses, conducts examinations, and issues certificates to the successful candidates.

The chamber of Commerce represent the grievances, problems, and issues of the business community to the government and tries to get them solved. In national and provincial budget formulation it forwards many valuable plans, schemes, and suggestion to the government.

The chamber provides its members treasured advice, important information, and effective solutions to their difficulties. Its services include provision of custom rules, market information, labor, commercial and industrial polices prepared locally or abroad.

Its members include bank, insurance companies, importers, exporters, hotels, wholesalers, retailers, etc.

Telecommunication

Introduction:

The Modern business, fast exchange of information and ideas, rapid contacts, radio, and TV programs all depend on telecommunication.It refers to the transfer of information and messages by electromagnetic means. Electromagnetic means are radio waves, also known as wire. The word "Electromagnetic" is the combination of electric and magnet which were earlier considered separate things. However, Maxwell later, discovered that both are different sign of the same things. According to him, magnetism is the result of relative motion of electric field.

Telecommunication includes telegraphy (telegram), radio, TV, Telephones, satellite receivers etc. The telecommunication system is made of a transmitter, a receiver, and a transmission channel (a medium).

Transmitter:

The transmitter sends the encoded message through a modulator. A modulator is a device which carries the message in the form of signals on an electromagnetic wave or an electric current.

Transmission Channel:

It is a wire, optical fiber, or radio waves, The waves work within a specified frequency range known as bandwidth. A single channel has the capability to send many signals at a time provided a multiplex is used. A multiplex is a device which combines many signals and used in all telecommunications.

Receiver:

It decodes the signals into desired form of message as sound, printout of the computer or teleprinter, or an electric signal to a computer. The receiver may have a noise or distortion if the signal takes two different routes instead of one desired. 

Commercial/Business Correspondence

Business correspondence refers to letters and is two way communication in writing between the sender and the receiver. It furnishes an effective means through which the sender conveys ideas, information, needs, perception, understanding, views and news. It bridges the geographical distance and provides and economic means for mutual exchange and fulfillment of needs. Many other media, as phone , fax , Internet, e-mail, telex, telegram, are also an effective means for quick transfer of information but they are costlier than letters that also provide a sound basis for legal action and form a permanent record for future reference.

Parties to Modaraba

The following are the parties to the modaraba:

1. The Investor (Modarib) : one who invest his money in the modaraba business.


2. The Company : It is the modaraba company which offers labor to multiply the investment.


3. The Bank : It acts as a trustee between the investor and the modaraba company. It should be borne in the mond that the relations between the investor and the modaraba company is in no case similar to that of the lender and the borrower. In case of lending, interest and the principal amount must be returned irrespective of profit or loss.

Situation of Modaraba

The three situations may be summed up as follows:

1. In case of profit both the investor (e.g individual) and the modaraba company will gain. The gain will be prorata to the investment.


2. In case of no profit. no loss, no one will gain, and the capital of company will be the loser because its labor has gone wasted.


3. In case of loss, the investor will lose his money prorata to his investment, and the company will only lose its labor.

Modaraba

It is another form or mode of Islamic financing. it is more popular and practiced than musharaka. Modaraba can be defined as, " an agreement between the investor (Modarib) and the modaraba company allowing the company to carry out business with the invested amount and pay profit to the investor according to the ratio of the borrowed amount" Here the lender is the capitalist, individual, or the investor. The borrower is the business corporation operating on the modaraba principle. If the modaraba company ( the borrower) earns profit, it will pay prorata profit to the lender, In case of no profit, no loss the borrowed or lent amount will remain intact and hence no profit will bepaid to the lender. In this case, in fact, the borrower ( the modaraba company ) is the loser since its labor has gone wasted. In the third possible situation, the modaraba company ( the borrower) may suffer a loss. here the lender will lose the money to the maximum extent of his investment. The loss will be prorata to his lent amount. Hence, the lender is the loser.

Disadvantages of Musharaka

1. It is extremely difficult to change from the system of interest based economy to that of interest free.


2. Undue interference of the lender (e.g the bank) in the borrower's business will be in place.


3. Borrowers suspect that the lender will ever share their losses.


4. The lender will suspect that the borrower will underestimate profits.


5. There will remain mistrust between the lender and the borrower.


6. The borrower's financial secrets will get open to the lender, the fact which may harm the former's business.

Advantages of Musharaka

1. It is completely in accordance with the tenets of Islam


2. Interest which is haram id ridden of.


3. It facilitates the establishment of Islamic society.


4. Conscience of Muslim is satisfied and in peace.


5. Rampant inflation may be controlled.

MUSHARAKA

Musharaka refers to profit and loss sharing between the lender and the borrower completely doing away with the interest. It is an arrangement of financing in which parties offer funds, efforts, or/and skills. Profits are shared among them according to the rate agreed upon. In case of loss, only one party suffers it which is the investor. In Pakistan, the Musharaka Financing mode has been launched by commercial banks to meet their working capital requirements of the trade and industry. The banks carry out musharaka a functions out of profit and loss accounts (PLS) deposits.

The borrowers receive interest-free loan on the basis of equity participation and profit or loss from the bank or any other financial institution. The lending bank enjoys teh right of participation in the borrowers business to the limit of amount of loan. In other words, the borrower is liable to the bank (the lender) up to the limit of invested (i.e borrowed) amount. In case of profit (or loss) the lender will receive his prorate share or profit (or suffer a loss). The agreement between the investor and the company is referred to as Musharaka Investment agreement which stipulates that the operation of the musharaka will be carried out by the borrowing company. The bank as a trustee will watch, evaluate, and supervise the performance. 

Modes Of Operations

Islamic Banks employ their funds in the following interest free loans:

1. Modaraba        (Venture Capital or Project Finance)


2. Musharaka       (Partnership / Profit and Loss Sharing)


3. Leasing             (Financial Leasing)


4. Bai-Salam         ( Deferred Payments Sales)


5. Murahaba         (Financing on cost plus basis)


6. 
   

Basic Concept of MUSHARAKA & MUDARABA

ISLAMIC FINANCING AND BANKING

The structure of Islamic Banking and financing is raised on profit or loss basis completely alienating itself from interest or usury.In other words the system is a substitute for interest-based economy.

Islamic bank can be defined as a financial institution which operates in accordance with the principles of Shariah. It does not advance loans at interest, and rather shares all risks with borrowing business corporations or individuals.

Long-Term Institutional Investor

The following are the important long-term investor who buy corporate bonds.

1. Life Insurance Companies


2. Fire Insurance Corporations


3. Corporate Pension Fund


4. Saving and Loans Companies


5. Commercial Banks (with primary emphasis on liquidity)


6. Investment Companies


7. Religious, Educational and charitable funds


8. Mutual Savings Bank


9. Provident funds of the companies

Joint Stock Company Corporation

A company can be defined as " An artificial being, intangible, invisible, but existing in contemplation of law". According to company ordinance 1984, " A business registered under company ordinance 1984 is a company"

Corporations have neither bodies to be punished nor souls to be condemned. They, therefore, do as they like" says Henry David Thoreau.

A company may also be defined as any business that issues shares the liability to which is limited.

A company is an artificial or unreal being but unlike partnership and sole proprietorship can enter in to agreement, can sue, can be sued, can borrow, all in its own name. It is not run by its unlimited number of owners known as shareholders. It management is run by the board of directors who are elected from among its numerous shareholders on the basis of share holdings. Owners holding a majority of shares ( at least 51 percent of the total share capital) reach the board. The ownership of the company is transferable. The Ownership is expressed by the number of shares held.

Digital Commerce (Internet)

Digital age has brought about a radical change all over the world in business and industries. Digital technology favorably affected the business world through computers and laptops taking advantage of wonderful technology of Internet.

If a management of a company does not adopt web and Internet it will be nowhere in the business world.

Internet is extremely boundless technology-based web of Internet contains a reservoir of countless amount of information,data, news messages, ads, reports, entertainment, statistics , and communication.

The use and utility of Internet has surged with the development of world wide web (WWW).

•  Intranet : It is the form of Internet when it is used within an organization for dispensing and receiving information, policies, rules, assignments, feedback and lots of other data necessary for running the Internet organization.

        Extranet: This form of Internet connects the company with the outside world including    

        customers, suppliers, bank, tax authorities and other. 

• E-Commerce: is wider in scope then e-commerce which is limited to buying and selling and related activities. It includes E-Marketing, E-Buying and E-Selling. It is doing business online. Buyers browse through information about products, brands, price, set their choice on a particular brand of product, place the order, and make payment using credit card or other electronic payment system.  

Credit Card

It is a modern method of financing daily purchases at retail level. It is in fact the means of financing of accounts receivable or replacing the charge accounts maintained by the retailer customers. Commercial banks sell credit cards of various companies such as Visa, Master etc. The Bank charges interest from both the retailer and the users. The card relieves the holder of the problem involved in carrying cash and facilitates buying at the retailing outlets and getting hotel services without fear of falling short of money.

Real Estate Loan

People may borrow for building or buying houses. House building finance companies and other specialized financial institutions cater to such needs.Loans provided for such purposes are referred to as real estate loans, which have the following attributes:

1. The are long term loans the period of which ranges from 10 to 30 years or so years.
2. Rate of Interest is worked out on the basis of the period of loans.
3. These loans are secured.
4. The title of ownership to the property rests with the creditor/lender.
5. The amount of loan is usually in hundreds of thousands.
6. Loan providers are house building finance companies and other specialized finance institutions.

Cash Loan

First two loans were in kind. Customers and consumers, however, may need cash to meet other requirements. Cash loans can be had from these sources.

1. Commercial Banks
2. Small Loans Companies
3. Credit Unions
4. Life Insurance Policy Loans
5. Pawn Shop / Pawn Brokers
6. Relatives and Friends
7. Loan out of provident fund

Hire-Purchase / Installment Sales

The hire purchase or installment sale is a kind of credit allowed to consumers. Like in the charge account credit is not in the form of cash; it is in kind.

This kind of consumer finance is also immensely prevailing everywhere. It is most used by salaried or those people who belong to low or middle income groups.

This method of finance prompts consumer to hire-purchase TV, furniture, cars, VCR , Refrigerators, and other home appliances. To avail this opportunity the buyer has to pay on the spot around 10 to 25 percent of the total price. This payment is known as Down Payment. The balance is payable in six, twelve, or eighteen months equal installments. The installments include interest.The greater the period the higher amount of interest is charged.

Charge Account

This is the commonest type of credit finance popular all over the world. Consumers, both ladies and gents, open an account with shops and stores from where they buy on credit throughout the month and pay off at the beginning of the next month. The usual period of credit is one month. Those who pay off their debts regularly are considered to be good and reliable customers. Those who are poor in paying off find it difficult to buy on credit.

The Charge Account is interest-free but the customer cannot receive cash discount. This is short Term loan is unsecured i.e no guarantee, surety collateral or security is required.

The account incurs cost on the seller. He has to meet the expenses on investigation, risk, collection, reminders, phone calls, book-keeping etc. Charge Account is common in home delivery of newspapers magazines, milk.

The main disadvantage of the account is that the account holder is inclined to excessive and unnecessary buying, and at the time of payment they feel over-burdened.

Consumer Finance

It is personal or domestic finance which a persons needs to live his life

Consumer finance is met by personal income and by loan.

If the personal needs are met by loans the following sources and types of consumer finance are available.

1. Charge Account
2. Hire-Purchase / Installment Sales
3. Cash Loans
4. Real Estate Loans
5. Credit Card