2.4 Status Of Interest-Free Banking Finance In Sub-Saharan

Main competitive pitch of Islamic banking is in Sharia compliant and interest free. But the real business of Islamic banking is producing profit.

. The CBE is located in the Ethiopian capital Addis Ababa, which is the center for business in the country. The bank was established in 1963 and is the first bank after Ethiopia’s victory over fascist Italy in

The bank came into existence on October, 2010 G.C. according to the Commercial Code of Ethiopia, 1960, and the Licensing and Supervision of Banking Business Proclamation 0. 84/1994 (18th annual Report,Number

An Islamic financial institution such as financial banking has been established before two or three decades ago in the aim to provide satisfactory financial facilities to the interested parties as compared to conventional banks. In 1974 Dubai Islamic bank which is the first Islamic commercial bank was established and later Islamic Development Bank (IDB) has been established in 1975 (Hennie and Iqbal, 2008).

The history of development bank of Ethiopia goes back to 1909 when the first attempts of its kind known as the societe narionale d’ ethiopie pour le development de l’ agriculture et de commerce (the society for the promotion of agriculture and trade) was established in the menelik II era. Since then the bank has taken different names at different times although its mission and business purpose has not undergone significant changes except for occasional adjustment that were necessitated by change in economic development policies of the country. For example, in 1975 when the socialism regime nationalized all the privately owned banks, the development bank of Ethiopia was merged with the investment bank to form the agricultural and industrial development banks. After that it was renamed to development bank of Ethiopia. It is established to spur the national development agenda. The bank’s focal point is the provision of customer focused lending to viable projects in line with government priority areas by mobilizing fund from domestic and foreign sources while ensuring its organizational

Islamic banking refers to a system of banking that complies with Islamic law, also known as Shariah law. The underlying principles that govern Islamic banking are mutual risk and profit sharing between the provider of capital (investor) and the user of funds (entrepreneur). In other words, it ensures an equal contribution for all parties involved, whether in profitability or in case of any loss occurred. Activities that involve interest (riba), gambling (maisir) and speculative trading (gharar) are prohibited (Bank Negara Malaysia, 2010). Islamic banking is interest free banking; making it compulsory to take active part in business profit and loss sharing. Islamic banks prefer to take less risk (Shaikh & Jalbani, 2009)

The experiment was conducted on the small level on Islamic and conventional banking . the experiment was goning to success to give a fruit full result this experiment further introduce Arabian and asian countries in 1970s .mostly Islamic banks are established in Islamic state just like Pakistan Saudi etc the working condition of the Islamic banking was started in micro level now the Islamic banking operation are expansion know they are woking on the macro level.. know the Islamic banking was working in the sixty countries and and there assets are based over 166 billion at the annual growth rate of 10% to 15% market share of the Islamic as well as conventional banks in Muslim countries has risen from 2% in the late 1970s to about 15%

From Standard Bank’s perspective, driving Africa’s growth is not only about facilitating grand infrastructure deals on the continent and providing innovative financial solutions to women that add value to customer lives. Though integral to economic development, such initiatives are pieces of a much larger puzzle.

The effects of a wide income gap in the population include low business confidence rendering transactions almost impossible. This coupled with an unsettled population that clamors for better living conditions and overall low productivity of goods and services. Incidentally these are characteristics already exhibited in Kenya and thus the time is opportune for corrective measures to be swiftly implemented. The poor were unable to secure banking services. Credit facilities were impossible to obtain. Times are changing, as banks in sub-Saharan Africa are fast realizing that banking the poor is worth the risk. Most of the credit facilities sought are small,

Introduction Now a day under taking marketing activities is compulsory and a key to exist in the business environment especially in the financial sector where competition is strong. In Ethiopia there are 16 private commercial banks and three public owned banks. There is strong competition among these banks to take market share and earn profit especially for those banks that enter the market recently. In addition according to the National Bank of Ethiopia Directive, all commercial bank have to reach 500 million paid up capital in the coming four years. In order to achieve this amount of capital these banks must sell new share, persuade their existing share holders to

Arab bank is a fully committed to the region, dedicated to economies and strives to deliver world class service. It fosters the growth and advancement of the whole community to provide them with the opportunity to grow. It value open and clear communication to promote collaboration and teamwork for earning confidence and trust to the shareholders and customers within the group and across business (Hissan, 2002).

Banks in Bangladesh are primarily divided into two categories under the supervision of central bank called BANGLASH BANK. The first category is the schedule banks that are created under the Bank Company act, 1991 for general banking purpose. The other sort is non-schedule banks which are created for special or specific purpose. As of this year there are 60 banks in Bangladesh. State controls 4 of them and 9 of them are controlled by foreign investors. There are also 9 Islamic Sharia based banks that are governed by Islamic financial regulation system. Now a day it has become the dominant financial market in the country because of the lack of development in the primary and secondary capital market. But the key problems lies the out-dated banking procedure and lack of coordination between different authorities (Ali, 2005).Bangladesh Banks hopes that the newly opened banks will help spreading and improving the banking service

A Thesis Submitted to the School of Graduate Studies of Addis Ababa University in Partial Fulfillment of the Requirements for the Degree of Master of Science in Accounting and Finance

Banks today for several reasons have become cornerstones of our economy and are the backbone of modern industry and hence the growth and development of nation is depending upon the soundness of the banking system. The general public sector banks (PSBs), which are the base of the keeping money area in India represent more than 78 percent of the aggregate banking industry resources. Shockingly, they are troubled with unnecessary Non Performing Assets (NPAs), labor issues and absence of present day innovation. Then again, the private areas banks are gaining enormous ground in the market. They are pioneers in web keeping money, portable account management (branchless banking), telephone saving money, ATMs, so on and so forth. To the extent remote banks are concerned they are prone to succeed in the Indian banking industry, but only with financial inclusion initiatives.

Today, its vital role in commercial banking activities lie in the direct effect it has on total economic growth and business development. Every year the (CBN) central bank of Nigeria being the monetary authority that is solely responsible for the insurance of guidelines policies and the interpretation of such, comes up with economic measure roles and regulation under which the bank in the country operate. Such policies direct the use of funds from depositors, stockholders, and creditors in order to control the size of loan portfolio thereby determining the general circumstances under which it is appropriate to make an advance. The monetary policies also aim at aiding the banks to maintain a sound financial and banking system promote confidence in sustenance of reasonable banking services for public as well as ensuring a high standard of conduct and professionalism in banking industry. These rules and regulations are contained in monetary policy circular being issued by the central bank at the beginning of every year.