Operation of the Islamic Banking System
Operation of the Islamic Banking System:There are currently over 320 Islamic banks operating in the world. However, this growth has been termed as extremely expensive. They have a large client base and this is proof that they are indeed a great phenomenon. Notably, theoreticians of Islamic Economy cause huge credit for growth of the present-day Islamic financial system.
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According to Islam law, interest discourages people to deal with mutual trade and production of produced goods. Once interest is prohibited in banks, individuals will at liberty to lend each other at will and as a result, they will do good deeds. Ideally, Islam believes that interest slows down the process of investment including total social development and economic development. Islamic banks are directly interested in the success of clients.
Reconciliation of Islamic banks and international banks is based on display of adequate information, investment and other risks and legal foundations as well. In this regard, legal frameworks contain various provisions relating to permissible modes of financing, and compliance with both regulations and laws.
Frick, M.-L. (2013). Islam and international law: Engaging self-centrism from a plurality of perspectives. Leiden: Brill.
Hassan, K., & Lewis, M. (2007). Handbook of Islamic banking. Cheltenham, UK: Edward Elgar.
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