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Islamic finance and conventional finance
Religion and Theology
Pages 3 (753 words)
Name: Instructor: Course: Date: Islamic Finance and Conventional Finance The relevance of Islamic finance, that which is in compliance with Islamic (or Sharia) law, is emphasized by the prevalent dissatisfaction with the performance of the global financial and monetary sectors, especially after World War II.
There is a growing global concern of the inequity in the allocation of wealth and income in the modern world, between and within countries, than has been witnessed before, with little hope of bridging the disparity. In this perspective, this essay will discuss ways in which Islamic finance can be seen as an innovative way that could substantively redefine finance and why it is different from conventional finance. Islamic finance is distinguished from conventional finance by the key attribute of adding moral and ethical aspects to fiscal transactions, hence providing a practical alternative to promoting responsibility in a free-market economy (Warner 301). Unlike the conventional financial and banking system, Islamic finance prohibits the opportunities for gambling-like speculation (or maysir), exchanging money for money (or riba) and making profit maximization the only endeavor for investment managers while disregarding other human perspectives of wealth. Instead, Islamic finance has innovatively introduced financial products based on Islamic law and also regulated and reciprocated by conventional monetary rules and regulations. Islamic Finance Products From the below examples, one can see that Islamic finance is geared towards reducing financial exploitation, especially among the less privileged. ...
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