to examine the differences in the banking systems in terms of lending and credit and the underlying ethics of the financial principles and practices utilised in these systems. On the basis of this, it is proposed to undertake a detailed study of the morality in lending law based upon empirical data collected on the banking systems in Saudi Arabia and the U.K.
In order to address this research question, it is proposed to undertake a detailed examination of the lending and credit systems in both Saudi Arabia as well as the U.K by looking into how effective the respective systems have been in terms of encouraging and fostering repayment. The notable feature about Saudi banking systems is the fact that charging interest is forbidden because it is considered to be against Muslim law, hence ethical issues may play a salient role. In view of the financial crisis that erupted in recent years, where the morality and ethics of lending decisions were questioned, it might be of interest to assess whether the ethical element inherent in Islamic banking law practices in countries such as Saudi Arabia could influence lending and credit positively. This is the reason for choosing this particular topic for the study.
Banks are financial intermediaries that accept deposits and channel those deposits into lending activities. Modern banking commenced in the middle ages in northern Italy, where Jewish banking developed because the Christians considered it as usury to charge interest. During the medieval ages, three different kinds of banking systems developed, such as the pawnbrokers, moneychangers who also accepted deposits and commercial lending banks (Seims, no date). This was followed by the emergence of paper money and in the year 1844, bank notes became the official legal tender in England. In the present times, banking laws have been harmonised to a considerable extent with several instruments being developed by the League of Nations and the United Nations Commission on