First, according to Section 2 IBA , Islamic Banking Business is business whose aims and elements do not involve any element which is not approved by the religion of Islam. Based on the definition stated, it is clear that the Islamic Banking practices must according to or complients with the Shari’ah obliged in the Al-Quran and As-Sunnah INTRODUCTION Islamic banking is the banking system which runs in accordance with the Islamic laws and the Shariah board that guides the institutions. Apart from that, Islamic banking is an interest free banking, which there is no fixed rate of return. The Shariah board authorizes the production that whether these are Shariah compliant or not Critique Of Islamic Banking Essay. Words5 Pages. Critique on Islamic Banking In the last two decades, Islamic Banking has expand and grown globally after gaining support and agreement from the oil-rich Gulf States such as Bahrain, Qatar, Iraq, Saudi Arabia, Oman and the United Arab Emirates (UAE). It became a successful global phenomena not only in majority Muslim countries but also in non
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Second principle of Islamic Bank is prohibition of Riba. Besides that, Islamic Banking should operate Syariah-approve activites which is one of the principle of Islamic Bank. Syariah-approve activities can be define as all the transactions or activities made by Islamic Bank should be permissible and non-contain any prohibit element such as pork, alcohols and gambling and for investment, Islamic Bank can only invest with company which not contain any prohibit element.
One of essay on islamic banking main reasons why consumers chose Islamic banking is purely based on essay on islamic banking strong robust ethical behaviour. Ethics in Islam include that there is justice, fair dealing, trust and honesty. Plus, prohibition of non-serious bidding Najash which is bidding on essay on islamic banking, shares, stocks and bonds.
Islamic finance is the financial framework that comprise the activities according to Islamic law that known as Shariah principle. In Islamic law, any activities involved must be prohibiting from riba. Riba means extra or excess interest in payment made by buyer or customer to the seller or bank. Besides riba, Shariah Law also prohibits any transactions that contain gharar uncertainty and maysir gambling. middle of paper system a lender can earn abnormal profit without participating in the business process of profit and loss share.
This system is fully based on Shariah rules and regulations. These rules and regulations are derived from the Holy Quran and Ahadees. The main factor that differentiating between Islamic bank and conventional bank is all his business are conducted without any elements of interest.
Interest also known as riba in Islam. This is because Islam prevent Muslim to give and take riba in all matters. Trade Haram 4. Support Islamic tax system Zakat Alongside these four rules, unethical behaviour needs also needs to be considered.
It is the key difference between Islamic banking and conventional banking. Islamic banks offer financing which is backed by assets. Islamic banks cannot deal in documents essay on islamic banking it is due to the asset backed nature results in dynamic economic activities. Additionally, Islamic banks need to comply with conventional regulatory standards as well as Shariah standards. Islamic banks do not conduct business with tobacco, alcohol and other dangerous toxic producing companies.
Islamic banks are not merely interest-free. Thus, all the laws of Islam have to be annexed to and borne of the Holy texts. Contrary to this, such laws would be regarded as un-Islamic. On the other hand, as regards the modern states, the mother of all laws is the constitution. It therefore follows that any law of the land must be in conformity with the Constitution; otherwise, essay on islamic banking a law essay on islamic banking be declared unconstitutional or ultra vires the constitution and would be of no legal effect.
In other words, no state has a right to enact any laws or rather provide for the application of the same, unless such laws have been expressly or impliedly guaranteed by the constitution, essay on islamic banking. Commercial banks in Pakistan were cased to accept any interest baring deposits and all deposits were treated on the basis of profit and loss sharing since institutions are not allowed to offer a fixed rate of return on deposits and nor are they allowed to charge interest on loansincome from and investment in all un-ethical economic activities like investment in gambling, pork, alcohol etc are prohibited Ayub, If Islamic banks cannot invest in bonds, T-bills, and commercial paper, or lend to finance inventory or projects for interest, it defeats the whole purpose of banking.
Even in Muslim countries, what is called Islamic banking is - to put it in the dismissive words of one western critic - "normal banking sprinkled with holy water. Home Page Essay Essay on islamic banking Islamic Banking. Essay On Islamic Banking Satisfactory Essays. Open Document. Essay Sample Check Writing Quality, essay on islamic banking. Our group have been assinged to discuss on the topic above but in Islamic Banking perspectives.
Therefore, before going any further, let us clarify definition of the Principles of Islamic Banking and clarify what are the elements involve in the Principles of Islamic Banking. Beside, we will also do some comparison of product or services offered by both banks which are conventional and Islamic banking.
Apart from that, we will also clarify the problems or challenge faced by the agency which practices the Islamic banking in their agency. First, according to Section 2 IBAIslamic Banking Business is business whose aims and elements do not involve any element which is not approved by the religion of Islam.
Unlike Islamic Banking, Conventional Banking practises its system based on man-made laws and not included any religious guidelines to support their systems. Thus, in order to counter this challenges, better awareness should be create among the customers that Islamic banking is not only valid to Muslims only. It can be widely use by other religion, essay on islamic banking.
Also, we need to aware the customers that Islamic banking not just an alternative for finacial approach, but it also provides better value to the customers. Therefor, it gives problem to the agencies as there are different methodologies that are being proposed when elaborating the law.
In order to counter this challenges, agencies need to take initiatives of choosing the view which is parallel or nearly parallel with what was underlined by the Al-Quran and As- Sunnah. Get Access.
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Introduction to Islamic Finance: Concepts and Structures
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INTRODUCTION Islamic banking is the banking system which runs in accordance with the Islamic laws and the Shariah board that guides the institutions. Apart from that, Islamic banking is an interest free banking, which there is no fixed rate of return. The Shariah board authorizes the production that whether these are Shariah compliant or not Feb 21, · The argument, as to whether Islamic banking is really Islamic, has two different facets. The first one is that whatever is being performed in the name of Islamic banking is apparently quite similar to the operations of a conventional financial institution hence creates doubts in people’s mind, as to on what grounds we can call it Islamic?Estimated Reading Time: 11 mins Critique Of Islamic Banking Essay. Words5 Pages. Critique on Islamic Banking In the last two decades, Islamic Banking has expand and grown globally after gaining support and agreement from the oil-rich Gulf States such as Bahrain, Qatar, Iraq, Saudi Arabia, Oman and the United Arab Emirates (UAE). It became a successful global phenomena not only in majority Muslim countries but also in non
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