Published information about principles of Islamic banking and finance and their applications is growing day by day. Pakistan is one of the 57 Islamic countries having a total population of over 170 million where majority of population practice Islam. Steps for Islamization of banking in Pakistan were initialized during 1977-78. Elimination of interest from the operations of specialized financial institutions took place in 1979 and from commercial banks during 1981-85. Commercial banks in Pakistan were cased to accept any interest baring deposits and all deposits were treated on the basis of profit and loss sharing since 1985. Islamic banking is defined as a banking system in consonance with the ethics and value system of Islam and is governed by the rules and regulations led by the Sharia’h. Main sources of sharia’h are Quran, Hadith, Sunnah, Ijmah, Qiyas and Ijtehad. According to Islamic sharia’h interest (Riba) is prohibited i.e. institutions are not allowed to offer a fixed rate of return on deposits and nor are they allowed to charge interest on loans , income from and investment in all un-ethical economic activities like investment in gambling, pork, alcohol etc are prohibited (Ayub, 2008). Financial activities in Islam are real asset backed with the ability to cause value addition. Most commonly used Islamic banking instruments in Pakistan are Mudaribah, Musharikah, Murabaha, Ijarah, Bai-Muajjal, and Bai-Salam. This study will help researcher cognize the awareness of Islamic banking culture as well as attitude toward Islamic banking in Pakistan.Background of the studyIslamic banking has been widely studies area since 1970s. Islamic banking was introduced to Pakistan in 1977-78. Interest elimination from the operations of spe...
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Islamic law may be hard to understand from a western perspective. There are many similarities, such as the way trials convene, but also many differences. The structure of Islamic Law and what they base their law on is vastly different than our own. In this essay, I am going to cover some of the major topics of Islamic Law. This includes Sharia, and how laws are derived from it. What is Fatwa, and why it is needed. How family practice law works and how it pertains to women. I will then finish with Islamic jurisprudence. Let us begin with Sharia.
1972 HBL opened the first of 11 branches in Oman. HBL constructed Habib Bank Plaza in Karachi to commemorate the bank’s 25th Anniversary.
Zaidon, S. (2008). Satu Tinjauan Literatur Penggunaan Portfolio Kanak-Kanak. Kampus Pendidikan Islam, Maktab Perguruan Islam.
Shariah is an essential section of Islam. It is frequently described as ‘Islamic law,’ triggering some to presume that it comprises primarily of criminal laws and penalisations. Nevertheless, Shariah comprises far beyond the conventional way of comprehending law. Although Shariah offers the legal structure for the establishment and functioning of humanity, it too specifies moral, ethical, social and political guidelines for Muslims at an individual level as well as at the collective society level.
The modern Islamic Finance industry is young, its timeline begin only a few decades ago. However, islamic finance is involving rapidly and continues to expend to serve a growing population of muslims as well as conventional.
The attempt to understand the origins and evolution of Islamic law can be daunting. As has been indicated, this matter is largely fraught with complexities and inconsistencies. Some clarity has been added as a study was done of the Islamic tradition and contemporary sources. As the history and resources from scholars has shown, the true history and development of Islamic law into the Sharia that exists today is still an on going debate. Yet, despite its suspect and complex origins, Islam has remained an ever-pervasive topic in contemporary religious discussions. The true sources of Islamic law continue to be an expanding field of study and will probably remain as such for some time.
“Islamic Finance is governed by the Sharia (Islamic Law), sourced from the Quran and the Sunnah”.
Based on the concept of usury and gharar under the wisdom of the prohibition of usury and gharar can say that is forbidden in the Islamic concept requires that the damages should exceed the interest and usury, reflects this clearly. Gharar illustrates the flexibility of Islamic law in terms of it being permissible when its benefits outweigh the harms. Through these findings we see a question emerge that deserves to be the focus of a discussion: are all contracts in Islamic banks completely free of usury?
Baitulmal means the Treasury, Baitulmal according to Fiqh is the exchequer of an Islamic state. Being public property, all the citizens of an Islamic state have some beneficial right over the Baitulmal, yet, nobody can claim to be its owner.
In this study, I will describe the concept of al-istisna by Islamic law as well as I will compare istisna in Islamic fiqh muamalat with conventional system which is practiced by banks nowadays. As we know, that the conventional banking system was produced a lot of economic products same as istisna concept. So, in this study, I will disclosure and explain all perspectives that is associated with al-istisna sales, and in the last point, I’ll give the best recommendation as the solutions to the risk that is involved in istisna.
4. In the modern Islamic banking system, it has become one of the service-oriented functions of the Islamic banks to be a Zakat Collection Centre and they also pay out their Zakat.
2. Conventional banking is assured by interest rate based debt financing resulting in continuous decoupling of the two sectors of the economy and increased fragility of the system. 2. The basic principle of Islamic banking is the risk sharing and the prohibition of riba between provider of capital and user of funds. There is one-to-one
As the world has recently passed through the global financial crisis that begun in 2008 in the USA with the banks’ collapsing, analysts are giving different opinions and making new economic hypothesizes about the origin of, as well as the process of different countries escaped from the crisis. Among all these new “theories”, the case of Islamic banks is interesting in terms of its nature and consequences. In my essay, I will try to highlight the basic principles of the Islamic finance, the reasons of the restriction of interest, the most important tools used by Islamic banks in economic activities and brief explanation of them, and finally my view point of the probable future improvement of the Islamic financial system.
Banking is a process that is involved in many ways with the business and trade. There are different types of banking in the present world. Two major types are the Conventional Banking and the Islamic Banking. Both of the banking systems are playing very important roles in the trade and business. The focus in this discussion is an evaluation about these two banking system. The chapters will address important bank characteristics that will be included in the regression models. The Ordinary Least Square method will be used to identify how bank characteristics impact bank profitability. The adopted methodology examines the sensitivity of internal bank characteristics on profitability indicators. The profitability study is conducted on Islamic banking system and is compared to conventional banking system. The discussion begins with a literature review and moves on to the critical evaluation and analysis, variable definition, model, and data variables, advantages, disadvantages, points agreed with, points disagreed, reasons, and evidence.
...ctices. Thus, in order to counter this challenges, better awareness should be create among the customers that Islamic banking is not only valid to Muslims only. It can be widely use by other religion.