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Islamic Banking - Essay Example
Finance & Accounting
Pages 6 (1506 words)
Islamic Banking Executive Summary Following is a report that entails the origins and the development of Islamic banking over the years. It also provides a critical analysis of growth of Islamic banking in India and China; the report not only highlights the growth of Islamic banking but also enlightens the reader on the limitations of the banking system and the conventional banking system…
Islamic Banking is a type of banking that is constantly based on the Islamic or Shariah law and its implementation is through the growth of Islamic economics. This type of banking system prohibits the fixed payment interest on loaned money and it also shuns the investment in the business that cater goods and services that are considered unlawful in Islam. Today more than 200 Islamic financial institutions exist around the world (Iqbal and Llewellyn, 2002). Ahmad El Najjar pioneered the first Islamic bank that came into existence in Egypt, in 1963. Thus, when 1976 ended, there were nine banks in the country that were established on the same concept; however, previously in 1974 the Organization of Islamic Countries had established a bank called Islamic Development Bank that purely ran on the principles of Islam. Although the bank was not a commercial one, it did provide funds for the businesses in order to encourage economic growth. After recognizing the Islamic banking system, several banks came into existence, such as Dubai Islamic Bank, Faisal Islamic Bank of Sudan, and the Bahrain Islamic Bank (Shariah-Fortune, 2012). Despite the growing trend in the Islamic banking system, unfortunately the inception of Islamic Banking in Pakistan did not survive. ...
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