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.
Since the beginning of Europe itself Muslims and Europeans have clashed over religious and cultural styles. This hatred began during the crusades when Christian Europeans drove out and killed Muslims that had begun to immigrate to their lands. Europe had been divided since into Western Christian Europe and Eastern Catholic/Islamic Europe. Even in current day the relations between the two cultures seems to have reached new peaks of instability. In Muslim culture the ideals of the West to do not sit well with them as Western Europeans are seen as blasphemous and scandalous in their eyes. From Western Europe’s perspective the Islamic culture is blasphemous and unprogressive compared to their ideals. Neither side has ever seen eye to eye
There are many differences and similarities between Muslim, Jews and Christians. One similarity that all three religions share is the belief in one god, although, Muslims refer to God as Allah. (242). All three religions have places where they go to pray and worship their god along with gathering with others of their faith for various other reasons (247). A Mosque is what the Muslims call their house of worship, a church is where Christians worship and a synagogue is where members of the Jewish community worship (247). Muslims do not believe in the Trinity as Christians do because Muslims do not consider Jesus to be the son of God, nor did they find him to be a “divine” being, meaning he is not god like (243). To Muslims, Jesus was just
The core ethical Islamic teachings play an important role of educating in the lives of adherents. Ethics is a set of moral principles and a system of moral values that one must follow. Muslims submit themselves to the will of Allah and look towards his teachings for guidance. “Allah showed great kindness to the believers when He sent a Messenger to them from among themselves to recite His Signs to them, purify them and teach them the Book and Wisdom, even though before that they were clearly misguided.” (Surah Al `Imran: 164).
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.
to its own follies, has led to the Bank to shift its focus from development to
Each and every individual has their own particular one of a kind personality and culture. Culture assumes a colossal part in forming your personality. A man's convictions and ethics are made up by culture and stay all through as long as you can remember. Culture is the thing that made you the individual you are today and figures out who or what you connect yourself with. Muslim culture by and large mirrors the conventions and traditions of Muslims that they receive for an immaculate and respectable life in the general public as per the lessons of Quran. Muslim culture is a large mix of different societies, that is on account of Muslims live in different nations everywhere throughout the world. The greater part of the practices are basic religions and direction for all Muslims regardless of what nation they live in. These fundamental religions and convictions depend on the lessons of Islam. The Muslim culture is a subject of level headed discussion for some individuals who lives in various parts of the world and have a place with assorted
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...
The limited of the people whose dealing with the bank her in Oman. Most of the people are from Pakistani community only and the percentage of the others people is very weak.
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.
On the board on Monday morning, there were numbers one through five and they each had a religion written next to them. 1 was Hinduism, 2 was Christianity, 3 was Judaism, 4 was Buddhism, and I was lucky enough to get 5: Islam. Oh, I know so much about Islam culture and their religion, are you kidding? I don’t even know where Islam is. I’m just kidding, it’s not a country. There are many differences between Islam and the United states like our religion, clothes, and food, and becoming a Christian or a Muslim, but Islam is the second largest religion in the world, so it’s important to a lot of people. The followers of Islam are called Muslims. Becoming a Muslim is not an easy process. You must do a long list of tasks. After you become a Muslim you must do everything in your power to try to have a good Muslim lifestyle.
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.
“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
Our group have been assinged to discuss on the topic above but in Islamic Banking perspectives. Therefore, before going any further, let us clarify definition of the Principles of Islamic Banking and clarify what are the elements involve in the Principles of Islamic Banking. Beside, we will also do some comparison of product or services offered by both banks which are conventional and Islamic banking. Apart from that, we will also clarify the problems or challenge faced by the agency which practices the Islamic banking in their agency.
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.
The Traditional Theory of Banking In this paper author review the traditional theory of banking and attempt to examine the theoretical reasons for why banks exist. As a financial intermediation, the natures of the banks are to provide financial services and conduct the intermediary functions in the whole financial system by accepting deposits and making loans. The question raised here are how they conduct these roles and why the borrowers and lenders do not come together without the banks for the saving of intermediation costs, why both of the two parties are ready to pay for their services and what’s the value added by the banks? The paper proceeds as follows. Section 2 offers a traditional view of banks and describes the nature of them.