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Finance & Accounting
Pages 8 (2008 words)
Name: Name of instructor: Date: Islamic finance Despite the upheavals and mayhem that exists between the Islamic world and the United Kingdom, as peculiar as it may seem, it is wise to say that Islamic banking and finance has found its way in the United Kingdom…
Their guiding principles and rules state that Allah owns everything in this world and that man has only been rendered permission to use it. In the United Kingdom, London has emerged itself to be the core ad centre of Islamic banking. In the United Kingdom, a decade ago, the business was perceived to be in its infancy this being the reason as to why its extent is limited (Rodney, 2000). A decade later, Islamic banking and finance has prevailed in the United Kingdom due to its unique characteristics. One of the most distinct characteristics that have made Islamic banking and finance business to grow is the fact that Islamic banking does not offer interests, which is commonly referred to as riba in the Islamic world. The reward for money deposited as perceived is done by not charging or paying interest. As a way of curbing the loss and profits occurred, Islamic banking use the technique of sharing both the profit and loss occurred. This is commonly known as mudarabhah, which in lay man’s term means profit sharing. In cases that involve mortgage buying, the bank itself buys the mortgage from the seller then giving it to the buyer making profits thus allowing the buyer to pay the money in installments. The mortgage is registered under the buyers name from the start to avoid any suspicions. This kind of arrangement is known as Murabah. ...
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