Various principles of issue of currency notes.

 The Fixed Fiduciary System: This is one of the oldest systems of controlling note issues.
 The Maximum Limit System:
 The Proportional (Fractional) Reserve System.
 The Proportional Reserve Not Based on Gold.
 The Minimum Reserve Syste

Why should a central bank be a state owned bank? Explain.

A central bank, reserve bank, or monetary authority is an institution that manages the
currency and monetary policy of a state.It is under the ownership of Ministry of
Finance,government of a country. Most central banks also have supervisory and regulatory
powers to ensure the stability of member institutions, to prevent bank runs, and to discourage
reckless or fraudulent behavior by member banks. Central banks in most developed nations
are institutionally independent from political interference.

Bangladesh bank does not perform the general banking activities,Why?

Bangladesh Bank (BB), as the central bank, has legal authority to supervise and regulate all
banks and non-bank financial institutions. It performs the traditional central banking roles of note
issuance and of being the banker to the government and banks. Given some broad policy goals
and objectives, it formulates and implements monetary policy, manages foreign exchange
reserves and lays down prudential regulations and conduct monitoring thereof as they apply to
the entire banking system

Riba:

Riba is a concept in Islamic banking that refers to charged interest. It has also been referred to
as usury, or the charging of unreasonably high-interest rates. There is also another form of riba,
according to most Islamic jurists, which refers to the simultaneous exchange of goods of
unequal quantities or qualities.
Profit: Profit describes the financial benefit realized when revenue generated from a business
activity exceeds the expenses, costs, and taxes involved in sustaining the activity in question. ...
Profit is calculated as total revenue less total expenses.

What are the Major modes of Islamic banking finance?

 Murabaha.
 Ijara.
 Ijarah wa iqtina.
  Istisna'a.
 Mudarabah.
 Musharakah.
 Bai al-Salam.

What are the distinguishing characteristics of Islamic babking?

The distinct characteristics which provide Islamic banking with its main points of departure from
the traditional interest-based commercial banking system are: (a) the Islamic banking system is
essentially a profit and loss sharing system and not merely an interest (Riba) banking system;
and (b) investment