Tuesday, August 2, 2011

Financial Support or Financial Crime?

In the name of Allah, the Beneficent, the Merciful.

May the peace, mercy and blessing of Allah be upon you, my readers.

Have you guys ever wondered how the bank generate their money over and over again? It is a non-stop process of sucking out our money. They are the 'blood sucker'.

Fist of all, this is not going to be a long entry. A short and simple one. Easier for you guys to understand.

How did the bank make money? Simple. By using our own money.

Let us take a simple example. A is a person who are the one deposited his money to a safe place. Well of course, in a bank. While B is a person who a re going to borrow the money from the bank.
Did B actually borrow the money from the bank? Bank's money? No. It is A's money.

A deposited RM1, 000. The bank will reserve 10 % from the money deposited. In such cases, the bank made a policy that the depositor are not allowed to withdraw more that 10 %. Then the bank will use A's money to lend to B for RM900 together with interest. So by the time when B needs to pay for the loan, he need to pay more than RM900 right?

So this process will cycle over and over again. Loan means their income. That's how they do it. By actually using our own money.

Let us take one real analogy. The most pertinent with our country system. Whenever any person wants to make a loan, they need to fill up the application form and usually they are advised to open an account with the minimum of RM20. As this person wants to have a card so that it will facilitate the flow of their loan money, he need to pay the extra cost of RM8. At this moment, the bank already made a money of RM18. RM8 for the card and at least, in your account there must be RM10, reserved by the bank.

If the bank generated of RM18 per person. Imagine that there are 100 persons per day that make a loan. Rm1, 800 per day. Now, imagine that the bank (let us called it as Bank Eddy) have 100 branches all over the country. That makes up of RM 18, 000.

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