These Islamic banks neither charged any interest nor paid it. The functioning of these banks was limited to the industries and trade in which they made investments either as the depositors’ partners, or using their own capital. Considering the functionality of these banks, they were more of financial institutions than the commercial banks we see today. The first commercial bank was opened in 1971 in Egypt with the name Nazir Social Banks. The charter of this bank did not refer to Shariah. The first bank that was entirely and overtly based on the principles of Shariah was made in the year 1974 by the Organization of Islamic Countries (OIC). The name of this bank was Islamic Development Bank (IDB). The function of this bank was to engage in the intergovernmental activities to provide funds to the member countries for developmental projects. The business model of IDB included fees for the financial services as well as financial assistance for the developmental projects through profit sharing. During the 1970s, numerous Islamic banks were established across the world which included but were not limited to the Dubai Islamic Bank established in 1975, the Faisal Islamic bank of Sudan established in the year 1977, followed by the Bahrain Islamic bank established in the year 1979. Several Islamic banks were also successively opened in the Asia Pacific region. The basic foundation of Islamic banking and how it differs from other banking conventions. “The basic principles of Islamic banking originate in the axioms of justice and harmony with reality and the human nature” (Kahf, Ahmad, and Homud 7). The simplest and the most fundamental definition of financing is the provision of goods, services, or any kind of production factors without the demand of an immediate counterpart on the part of the receiver. For example, employees in an organization deliver their services throughout the month and get paid at the end of the month. Islamic banking in its direct sense is very much based on the same principle. Islamic financing means provision of production factors for which payment is rescheduled. “Real-life exchange and production processes have, as part of their components or forms, the provision of goods to consumers as well as equipment, materials and other means of production to producers” (Kahf, Ahmad, and Homud 8). This lays the foundations of the practices of Islamic banking. Islamic baking provides funds in terms of goods, machinery, or equipment for payments that are deferred. Islamic banking also provides the option of profit sharing. Such financing is based on justice as both parties share the profit made from a productive project according to their investment ratio along with sharing the risks involved. Comparison between Islamic Banking and Other Banking Conventions It is odd to draw comparison between the Islamic banking practices and the conventional banking practices because of the immensity of difference between the two. The most fundamental difference between Islamic banking and other banking conventions is that the former is based on the Shariah foundation whereas the latter are not. Islamic baking is characterized by non-existence of transactions that are interest-based. Islamic baking is devoid of any economic activity that involves oppression or speculation. There is imposition of Islamic tax called as “zakat” in Islamic banking. Islamic banking does not allow production of such goods and services that are considered Haram in
Cite this document
(“Islamic banking in the GCC in the Next ten Years Essay”, n.d.)
Retrieved from https://studentshare.net/finance-accounting/10339-islamic-banking-in-the-gcc-in-the-next-ten-years
(Islamic Banking in the GCC in the Next Ten Years Essay)
“Islamic Banking in the GCC in the Next Ten Years Essay”, n.d. https://studentshare.net/finance-accounting/10339-islamic-banking-in-the-gcc-in-the-next-ten-years.
Cited: 0 times
Islamic banking in the GCC in the Next ten Years Introduction History of Islamic Banking The foundations of Islamic banking were laid with the emergence and spread of Islamic over 1400 years ago. The first example of Islamic banking surfaced in the year 1963 in Egypt…
In the United States, students undergo elementary, secondary and higher education before joining the job market. According to Jackson high education institutions and students are distributed differently across various types of colleges and universities.1 The 2009 enrollment rates show that most of the 2-yr and 4-yr colleges are privately owned, but enroll a small percentage of students than the public colleges and universities.
In order to provide the mentioned topics above, different studies and empirical evidence have been provided in the report. Islamic Banking a) Before proceeding with the origins of Islamic Banking, it is necessary to be familiar with the definition of Islamic Banking.
The largest Islamic banks (IBs) belong to the countries of the Gulf Cooperation Council (GCC). The 2008-2010 global financial crises brought a fresh perspective on the relationship between financial stability and Islamic banking, especial in relation to the flexibility of such an industry during financial crises.
More elaborately this report will show the importance of Islamic Banking, development model for a country through Islamic banking.
3) In the next part I discussed about the Islamic Banking in Bangladesh and try to show the situation of Islamic Baking through situation analysis.
Islamic banking has been one of the less popular banking systems in the financial market. It should be noted that even though Moslems accounts for 20% of the total world, the number of Islamic banks in the globe is only a small portion relative to commercial banks.
Through the Islamic financial system there is a facilitation of services such as lending, borrowing and investing on a risk-sharing basis. The Islamic financial system can be called a value-based mechanism and the main target is to ensure “moral and material wellbeing” of the persons as well as the whole community.
, I agree to an entire electronic copy or sections of the Project to being placed on Blackboard, if deemed appropriate, to allow future students the opportunity to see examples of past Projects. I understand that if displayed on Blackboard it would be made available for no
Islamic banks prohibit the collection of interest on grounds that money should not be treated as a commodity that can generate profits. The rules that guide Islamic banking tend to be based on certain ethical principles,
Essentially, Islamic banking and finance operates on a justice principle, which is fulfilled largely through the sharing of risk. On the other hand, the conventional intermediation is debt based, which allows for risk