About Credit Card Numbers (BIN) and how they work

 

 

It’s a Visa credit card,while different card types offer different lengths of numerical digits, most major credit card issuers popular in the United States have 16 primary numbers on the front face of the card. Visa, MasterCard, and Discover cards all have 16 digits.

 

American Express is the only major credit card issuer in the U.S. with one less number – at 15 digits. Regardless of the length of numbers, their numerical sequencing is still guided by the same Luhn validation formula, the mathematical check sum equation that makes all valid credit card numbers error free.

 

The very first 6 credit card number sequence is known as the issuer identification number (IIN) or bank identification number (BIN). These first 6 numerical digits denote the credit card network and the banking institution the card is a member of. The issuer identifier number also incorporates the card type’s special identifying numerical prefix

The numbers found on credit cards have a certain amount of internal structure, and share a common numbering scheme.

The card number's prefix is the sequence of digits at the beginning of the number that determine the credit card network to which the number belongs. The card number's length is its number of digits.

The prefixes and lengths for the most common card types are:

Card Type	Prefix(es)	Length
American Express	34 or 37	15
BankCard	560–561	16
Diners Club / Carte Blanche*	300–305, and 38	14
Discover Card	6011,6500–6509**	16
JCB	3	16
JCB	1800,2131	15
MasterCard	51–55, 36	14,16
Visa	4	13 or 16

*As of November 8, 2004, MasterCard purchased the domestic (US) Diner's Club bin range. Diner's Club International BIN range will remain (starting with 38), but the 36 bin range will now be processed as MasterCards.
**As of October 1st, 2005, Discover Bank will include a new BIN in the range of 650000–650999.

In addition, the first 6 digits of the credit card number are known as the Bank Identification Number (BIN). These identify the institution that issued the card to the card holder.

Some credit card issuers choose to restrict the card numbers they issue to those which pass a checksum test, where the final digit of the card number is used to confirm the initial digits.

This has two benefits of preventing casual attempts to invent credit numbers (only one in ten will be valid), and also prevent mistakes when the card number is manually recorded. The checksum test for credit card numbers is the Luhn formula, described in Annex B to ISO/IEC 7812, Part 1.

American Express, in particular follows the following specific algorithm:

First 4 numbers, country code, currency code and card type (ie charge or credit card)
Next 2, card type (ie gold, platinum)
Next digit, billing cycle
Next 4 digits, account number
Fourth from last, card issue (begins at 1 and will go up if it's replaced because the card is lost or stolen)
Next two, card issued under the account (ie if there are additional card holders. begins at 00 and increments)
Last number, Luhn-10 check digit (used for verification)

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Top 100 Islamic banks defy recession woes as combined assets grow 66%

The Asian Banker has released its annual ranking of the world's top 100 Islamic banks by assets.

Combined assets of world's 100 top Islamic banks increased 66 per cent last year, bucking the trend of slow growth in other markets.

 

Asia's 300 largest banks, for example, only grew assets 13.4 per cent in the same period according to a survey conducted by The Asian Banker, a Singapore based publication.

 

"Islamic finance has seen an incredible surge in popularity, based on stronger regulatory regimes and a better international understanding of its dynamics," says Emmanuel Daniel, President and chief executive of The Asian Banker.

The report notes that Islamic finance assets are largely concentrated in Iran, Kuwait, Malaysia, Saudi Arabia and the UAE, but growth drivers have come from all over the region, in particular Al Rajhi Bank, which saw assets increase 32.1 per cent.

 

Banks in Bahrain, Malaysia, Kuwait, Qatar, Syria, and the United Kingdom also saw significant double or triple-digit asset growth.

 

Despite the financial turmoil in late 2008 that crippled so many large Western institutions, Islamic banks have continued to grow in prominence and size.

 

According to Asian Banker Research, the world's 100 largest wholly Islamic banks ranked by assets held more than $580 billion (Dh2.1 trillion) in assets in 2008, a 66 per cent increase from the $350 billion they held in the previous year.

 

The top ten banks remained largely the same as the ones that dominated the previous year, with Bank Melli Iran (BMI) still topping the list and Saudi Arabia's Al Rajhi Bank in second place, albeit catching up rapidly with a 32 per cent surge in assets compared with BMI's negligible growth.

Iranian banks are still the biggest Islamic banking players, holding seven out of the top 10 ranks, and 12 of the 100.

 

The Iranian banks also take up around 40 per cent of listing's assets. The four next-largest markets - the UAE, Malaysia, Saudi Arabia and Kuwait - each has similar asset sizes to one another, and together carve out nearly another 40 per cent of the ranking's assets combined, with smaller banks in 10 other markets rounding out the list.

 

Although two Islamic banks in the United Kingdom are large enough to be in the top 100, Islamic banks headquartered outside the Middle East, Asia and North Africa are still very small next to longer-established players in the Middle East.

 

East of Iran, as only Mal-aysian and Bangladeshi Islamic banks have a significant amount of assets. Indonesia, the world's most populous Muslim nation, only has two banks on the list, while Pakistan has three, and Brunei and Singapore one each.

Saudi Arabia's representation is proportionately the largest, as the three banks it has in the list are all in the top 35.

 

Sudanese banks appeared to be among the weakest, with only seven appearing in this year's ranking, down from 19 in the previous ranking.

Despite the size of the Iranian banks, Saudi Arabian banks are much more profitable - the three Saudi Arabian banks in the top 100 Islamic banks contributed 19 per cent of the ranking's total income.

 

Al Rajhi Bank had the highest net income figure of $1.74 billion - the only bank to break the billion-dollar mark, which was almost three times more than the second-placed Kuwait Finance House.

 

The bank also earned over five times the most profitable Iranian bank, Bank Tejarat. The bank that jumped the greatest in the asset ranking is Dubai's start-up lender Noor Islamic Bank, which climbed up the ranks to 20th this year. (www.GulfNews.com 29th August 2009)

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Islamic Banking in Pakistan: A consumer perspective

THE Idea of Islamic Banking is still hot these days in Pakistan. Either completely new Islamic institute are being emerged or recent traditional banks are opening additional branches focusing in Shariah-based Financing products/services. But still consumers doubt that how much are they Islamic? Three years back, Fazal Ahmed, chief financial officer of the Islamic Investment Bank quoted that “Pakistan followed Malaysia and Bahrain considered the role models of Islamic banking while it formulated its regulations, now Pakistan has the best possible framework for Islamic banking that it can”. But, at the end of the day, government institutions and authorities cannot judge whether they have proved themselves or not while consumers do.

 

Now, according to the average consumer of the Islamic banks in Pakistan they still have doubt in their mind from the scratch to the main services provided by Islamic Banks.

 

Consumers would be open to the thought of acquire Islamic banking products and services given that the organization that is offering the service is renowned, and better customer service features such as ATM access, phone banking and so on, are offered. This provides a great prospect for Islamic financial organizations in a market that already have many other competitive existing commercial banks. If Islamic financial organizations can make on their understanding and status in the monetary world, and can offer Islamic banking products/services in non Islamic markets such as Singapore, United Kingdom, Australia, they can plan to increase an emergent consumer base of the local residents in Pakistan, some of who may have beforehand excused themselves from dealing with the usual financial organizations because of the use of interest. The consumers still also believe on the fact the lack of consciousness about some basic concepts and philosophy of Islamic banking. In Pakistan, a number of consumers would not adopt halal banking products because they feel insecure that what will happen if credit facilities were taken away. In the Islamic monetary structure money is not lent out, as an alternative it is an asset-backed scheme where monetary organizations invest in projects. Consequently, financial organizations deal in equity, not debt. To counter this inadequacy, some banks have started issuing ‘debit’ cards. These cards are alike to the credit cards excluding the actuality that they use the consumers own funds as an alternative of trust on any credit. Another concern is that of sharing profits and not losses. A lot of consumers who have been using the Islamic banking services were not educated about the loss sharing concept earlier. This would designate that some economic organizations have been assuring profits. In fact, it breaches the fundamental law of Islamic financing structure that is, relating compensations to risk. Any kind of money earned on investment without risk is simply interest more willingly than profit.

 

So, it reveals the fact that, in order to recognize how the Islamic structure makes a distinction between profit and interest, they have to look at the dissimilarities in financial beliefs. Because past experiances have already shown that the rationale of ‘monetary and financial standing’ is very important for a consumer to select a particular bank. In capitalist theory, capital and entrepreneurs are taken care of as two separate identities of production where the first identity acquires interest and the second identity is permitted to get the profit. It is implicit that interest is a fixed return to offer capital, and profit can simply be produced after allocating the fixed return to land, labor and capital. On the contrary, the Islamic monetary system does not regard as capital and entrepreneurs as separate identities of production. It accepts as true that each individual who puts in capital in the figure of money to a business enterprise assumes the risk of loss and as a result is permitted to a proportional share in the actual profit. The system is caring of the entrepreneur, who in a capitalist economy would have to make fixed interest repayments even when the venture is making a loss. Capital has a fundamental aspect of entrepreneurship, until now as the risk of the industry is apprehensive and for that reason, rather than a fixed return as interest, it develops profit. So, as much profit one earn of the business, the more return on capital. The profit would be privileged if there are no fixed interest repayments. In this fashion the profits produced by the money-making activities in the public are uniformly dispersed among those who have given capital to the organization. In this way, an integration of social responsibility and extra Islamic values in rewarding consumers’ needs to be worthy of ultimate consideration as it signifies an excellent and basic discrimination between Islamic and conventional banking systems, and potentially competent to push Islamic banking to better pinnacle in securing consumers’ gratefulness and response.

 

Top researchers in the area of Islamic Finance have affirmed that assurance made by organizations that consumers will take delivery of a set rate of return without having to acquire losses are prohibited and immoral. Thus far, not only are financial organizations enduring the practice but government societies in Muslim nations are also contributing venture openings with certain income. Taking into consideration, that the Muslim administration is accountable for overseeing the structure in order to battle the prohibited practices of monetary institutes, by giving definite returns; the governments are seen to be overlooking the performance of the monetary organizations. Even though these proceedings may assist Islamic Banks develop in the short run, but in the long run overall cost will prevail over the profit in shape of damage to the repute and legitimacy. Such progress also offer ammunition to the detractors of the system who are previously questioning whether the structure is nothing more than an interest based system operating under the guise of profit.

 

The most essential information discovered by the past behaviors is that consumer satisfaction over and over again is directly related to the quality of services that Islamic banks offer. The excellence of services comprises of factors like taking care of consumers with politeness and admiration; workforce capability to put across faith and self-assurance; effectiveness and efficacy in managing any operation; and well-informed and attentiveness in offering clarifications and answers relating to the products and services of an Islamic bank.

 

As a result, Islamic bankers can no more rely only at marketing strategy of pulling religious and holy consumers towards them who might only worry about Islamicity of banking services. Some significant insights acknowledged on the bases of different thoughts of consumer baking selection criterion entails the requirement for Islamic banks to improve its quality of services which is at the present measured as an important success factor that have an effect on an institute’s competitiveness. With respect to the standing of a variety of bank selection criterion, some of these would undoubtedly revolutionize accordingly of people having turn out to be extra conscious of the culture of Islamic banking. For instance, media advertising would be probable to have an extreme good impact on Muslims. The aspiration by Muslims to be compensated a high rate of interest have to decrease. In case of non- Muslims, media advertising may turn out to be well rated accordingly of being uncovered to revealing bank promotion.

 

Besides this, an additional considerable subject, which needs awareness, is the need to strengthen community learning and understanding towards the distinguishing features of Islamic banks and how it may beneficially go with the concern of consumers in their economic transactions. Islamic banks have latent of being advertised to different sectors of consumers who are worried with the legality of the ability from Islamic viewpoint and those who try to find for service value, handiness and well-organized business. Customer learning programs are for that reason vital if they are to amplify the level of customer consciousness about the distinctive features of Islamic banking and the range of services and products offered by it.

 

On the whole, after consumers have been uncovered to the ethnicity of Islamic banking, it would be anticipated that consumer’s knowledge of what Islamic banking engages would enhance and their thoughts towards this type of banking should vary. The change would be estimated to be much bigger in local consumers. Similarly with the standing of the different banking selection criterion. Shifts would be likely, extra predominant with banking customers throughout the country.

 

(This article is contributed by Fahad Ramzan, courtesy: Pakistan Times!)

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How it differs - Islamic vs Conventional credit cards?

Muslims always say that their divine religion, always present solutions to every problem. Bank interest is always considers as an issue in mankind history, if we exclude banks history from there!

 

No one, regardless of religion, likes the interest and especially interest on Credit Cards. A credit card is a modern day tool that allows users to carry out financial transactions using plastic card.

 

What solution is there in Islamic banking to resolve the issues of credit card interest?

 

- high annual maintenance fee (AMF) without monthly interest

- a buying & selling methodology

- prohibition of usage to buy haram items

 

A common man always compares a traditional credit card with an Islamic credit card and finds very less difference! why????

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A conventional and an Islamic bank - side by side!

When yesterday, a colleague of mine who is a banker too, has asked me as "have you noticed the growth of Islamic banks in last 10 years all over the world?" I just responded by saying "yes" without any arguments!

 

But the fact is having much more depth than for any new theory. Why the world is switching to Islamic mode of banking which outlines prohibition of "riba" (interest) and world's top class banks are opening Islamic banking windows!

 

Is this a real fact that world financial leaders -even in the current crisis of crunch- have noticed or view Islamic banking as a positive change or it is something else?

 

By looking at various top class banks, it is clear that with conventional banking they do have a sort of Islamic Banking window! reasons might be different but the fact is that is exists!

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Why so much pain!!!

A middle aged lady has walked into the branch of a bank and started talking to the front desk banking officer:

 

"I want to open a bank account."

 

"Madam, for what reason, if I may ask you!"

 

"Yes, I want to do a time deposite"

 

"Ok"

 

"Are you looking for higher rates?"

 

"Off course, yeah"

 

"Shall I suggest you to look at our non-interest base products?"

 

"No, I heard about that and its a great pain!"

 

"May I help you have minimum fuss about that?"

 

"No thanks"

 

This was the conversation and the talented relationship officer had tried to divert the customer towards Islamic banking but failed due to customer satisfaction issue.

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Why Interest? by Muhammad Ali Nadeem

When people use to ask me as “why interest is prohibited” in our society? Look at the banks structure, we have some money, we are going to open an account and deposit our money, probably hard earned, to make some money out of it? They usually give me few examples such as “I am 65 years old retired government officer, I have received approximately rupees 500,000 at the time of my retirement, and now I feel that I don’t have some skills and strengths to invest that money in any business, hence I am putting them in a bank as a time-deposit where I could earn some money at the rate of 5% or 6% per annum.” I would get some money to bear my living expenses as well as there wouldn’t be any risk and my money would be secured and could be enchased any moment. If I invest it in any business, say if I open a shop there’s no guarantee that it would earn me some money to manage my expenses and the risk of failure remains there for ever!

I never use to answer them with logics and arguments inviting them to learn Islamic finance concept. I only tell them that there are many Islamic banks in Pakistan, you may invest your money in such Islamic financial institutions and get profit at the same rate of interest, to avoid interest which is a prohibited concept in Islam!

The response was not very much positive!

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Money Matters: Usury in Hinduism and Buddhism

Among the oldest known references to usury are to be found in ancient Indian religious manuscripts and Jain (1929) provides an excellent summary of these in his work on Indigenous Banking in India. 

 

The earliest such record derives from the Vedic texts of Ancient India (2,000-1,400 BC) in which the “usurer” (kusidin) is mentioned several times and interpreted as any lender at interest.  More frequent and detailed references to interest payment are to be found in the later Sutra texts (700-100 BC), as well as the Buddhist Jatakas (600-400 BC).  It is during this latter period that the first sentiments of contempt for usury are exressed.  For example, Vasishtha, a well known Hindu law-maker of that time, made a special law which forbade the higher castes of Brahmanas (priests) and Kshatriyas (warriors) from being usurers or lenders at interest. 

 

Also, in the Jatakas, usury is referred to in a demeaning manner: “hypocritical ascetics are accused of practising it”.

 

By the second century AD, however, usury had become a more relative term, as is implied in the Laws of Manu of that time:  “Stipulated interest beyond the legal rate being against (the law), cannot be recovered:  they call that a usurious way (of lending)” (Jain, 1929: 3-10).  This dilution of the concept of usury seems to have continued through the remaining course of Indian history so that today, while it is still condemned in principle, usury refers only to interest charged above the prevailing socially accepted range and is no longer prohibited or controlled in any significant way.

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The concept of “usury”

The concept of “usury” has a long historical life, throughout most of which it has been understood to refer to the practice of charging financial interest in excess of the principle amount of a loan, although in some instances and more especially in more recent times, it has been interpreted as interest above the legal or socially acceptable rate.   Accepting this broad definition for the moment, the practice of usury can be traced back approximately four thousand years (Jain, 1929), and during its subsequent history it has been repeatedly condemned, prohibited, scorned and restricted, mainly on moral, ethical, religious and legal grounds.  Among its most visible and vocal critics have been the religious institutions of Hinduism, Buddhism, Judaism, Islam and Christianity.    To this list may be added ancient Western philosophers and politicians, as well as various modern socio-economic reformers.  It is the objective of this paper to outline briefly the history of this critique of usury, to examine reasons for its repeated denouncement and, finally, to intuitively assess the relevance of these arguments to today’s predominantly interest-based global economy.    The scope will not extend to a full exploration of some of the proposed modern alternatives to usury, except to describe the growing practice of Islamic banking as an example.

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