Introduction
The co-existence of conventional banking along with Islamic banking gives an exceptional platform to compare Islamic banking practices with those of conventional banking practices. It is clearly known that Islamic banks are different from those of conventional banks since they do not deal with interest (Riba), i.e. usury, which is totally banned in Islam. In other words, banks are not allowed to take an interest rate on the loans given to customers. The concept considered in Islamic banking is the profit-and-loss sharing (PLS) which is based on profit-sharing and joint-venture that goes with Islamic Sharia. In fact, PLS adapts the system of integration in which borrowers share profits and losses with banks with their depositors ( Khan and Mirakhor, 1990). To some extent, Islamic banks are quite better than conventional banks, in a sense that borrowers and depositors share profits and losses with each other. Adapting the PLS paradigm can allow borrowers to have long-term loans on their projects which lead to a boom in the economic growth (Chapra, 1992) and (Mills and Presley, 1999). The privilege of PLS paradigm is to set off good customers from bad ones since the PLS requires to search more for potential customers. This might force banks to control and watch their investments and borrowers closely to ensure that their capital is invested properly and effectively. To this effect, the key positive about PLS banking is the allocation of capital which depends on productivity and quality of projects financed (Khan, 1986).
Islamic Banking in Jordan
Islamic banking started in Jordan in the late seventieth of the last century. Looking at the Jordanian banking system, we could find that is not Islamic in which only four Is...
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...ere enlarged. Not only this, both banks have been able to fund projects in Jordan. Also, these banks have accentuated their efforts on funding short-term investments. Finally, these banks have grown and established for themselves in deals and facilities in the market.
Siraj and Pillai (2012) on their study about the 'Comparative study on performance of Islamic banks and conventional banks in GCC region" investigated the operation of six Islamic and six conventional banks in Arab league countries during 2005-2010. They assessed the expense operation, assets, operating income and deposits for these banks. They found that the tested Islamic banks have higher Return on Assets (ROA) and Return on Equity (ROE) than conventional banks. Considering the speed of development of operating income at Islamic banks, it was also higher than operating income at conventional banks.
Bank of America is an international and widely known banking and financial corporation. Its headquarters are located in Charlotte, North Carolina, and the Bank of America is the second largest bank holding company in the United States of America. A bank holding company is a company that owns and controls one or more banks, but does not necessarily take part in the act of banking itself. This gives it a greater range of flexibility that enables it to raise capital for itself more easier than a traditional bank. Other benefits include: “The holding company can assume debt of shareholders on a tax free basis, borrow money, acquire other banks and non-bank entities more easily, and issue stock with greater regulatory ease.”. In essence, this grants the bank holding company a much more freely moving business that has a distinct advantage over its lesser bank brethren. Bank of America has a variety of interesting topics that will be extensively and thoroughly covered. These include Bank of America’s history, its financial and stock analysis, its multitude of operations, and the large number of controversies that surround the Bank. Once the said topics have been rigorously and exhaustively described, the beautiful conclusion will rear its head and allow the reader to bask in the satisfaction of finishing this extremely interesting paper.
This paper will encourage readers to learn more about Bank of America, the second largest in the world and is the fastest growing business in America, the investments that the bank has to offer is up to standards. Its revenue is one of the highest in the country, the headquarters is in Charlotte, NC, with dates of starting as back as far as the 1900’s. Also, people may not realize that Merrill Lynch is part of Bank of America, the bank is also with the NYSE. The company has expanded and grown over these years, and are still improving their services to continue with the work that is offered for individuals, corporations, international operations as well as the investment managements.
It is adequate to note that the financial assets in banks for the rich Arabs, their amount is valued is more than 1190 ...
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.
Since it’s establishment CIB has been consistently awarded for its broad range of products and services on numerous occasions by international publications. Awards won include “Best Sub-Custodian bank in Egypt” for five consecutive years; along with “Best FX Provider in The Middle East” by Global Investors 2012. Furthermore, as of December 2013, CIB’s gross loan book reached EGP 46 billion, while customer deposits marked EGP 97 billion, with a paid-in capital of EGP 9 billion; making CIB the most profitable bank in Egypt. In addition, CIB’s marketing capitilization is the highest in the banking sector in Egypt, amounting to over EGP 29 billion as of December 2013. Furthermore, they operate a wide distribution network of with 152 outlets and more than 500 ATMs. It also has subsidiary brands like CI capital, CIBC, FALCON (for monetary transport) and ot...
The primary objective of this article is to lay down the hypothetical framework, which discusses the Profit and loss sharing based on Islamic principles with the investment of interest free partnership. According to the author, Islamic financing is based on the risk that is beard by the both parties. On the time of investment, whether agents have shortage or surplus of resources, they have to share the returns and risk on the investment they are making. General concepts of Islamic financing instruments like Mudarabah, Musharakah, Murabahah, Al-Salam and Al-Ijara are based on the mechanism of profit and loss sharing (PLS). All of these above mentioned partnerships are based on the agreed upon the subsequent loss or th...
In Corporate and Institutional Banking (CIB) we will either upgrade or exit clients where returns are poor; favour network businesses such as Transaction Banking and Financial Markets; and build a leading position in banking selected buyers and their suppliers
“EastWest Bank continued to post healthy growth in its core deposits and lending businesses and ended 2011 with Php1.732 billion in net income. While lower by 4.3% from 2010, this was due to the lower trading gains of Php 587.2 million in 2011. Nonetheless, over the last five years, the Bank’s
In this chapter, the data collected were systemically processed, tabulated and made suitable for analysis and interpretations. It was a study on stock price movement in selected banking companies through data collected for the nine months from July to March. The performance is analyzed for the stock prices of Current market price, Yearly high, Yearly low, Last completed financial year value, Sales, Operating profit margin, Net profit, Equity, Earning per share, Book value, Factor value, Dividend and Price Earnings. The results obtained were classified, tabulated and the following analyses were performed in fulfilling the objectives of the study.
Historical function of the investment banks in Malaysia. Discuss the function of banks as early as in the 50s-60s and make comparison with the 70s & 80s as well as what is new in the year of millennium.
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.
As we know the financial service are of two types 1. The depository institutions 2. Non-depositary intuitions. In this let us consider depository intuitions and let discuss on it. The major example of financial depository institutions is banks. As banks accepts deposits from its customers. Banks play very virtual role in developed economy, like Oman. In this assignment let us take National bank of Oman as an example. National bank of Oman is very famous and busy bank in Oman majority of citizens of Oman bank with it.
...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.
A variety of groups are concerned in bank profitability for various reasons. The bank shareholders would want to know if the value of their investments is high or low. The investors also use current and past performance to predict future price of the banks’ shares traded on the stock exchanged. The management of the bank as trustee of the shareholders is evaluated and compensated on the basis of how well their decisions and planning have contributed to growth in assets and profits of their banks. Employees of bank also are concerned with profits, since their salaries and promotions are frequently tied to the profitability performance of their banks. Depositors use bank performance and profitability as indicators of security for their deposits in the banks. Finally, business community and general public are concerned about their banks’ performance to the extent that their economic prosperity is linked to the success or failure of their banks.