Islamic banking

In the Islamic banking system,according to sources and causes of risks, it might be an external risk which due to changes in risk policies and regulations caused by banking supervisory authorities ( regulatory risk ) or macro and external impact of benchmarks such as LIBOR interest rate factors, namely the use of determine the speed mark Islamic Bank ( known as interest rate risk ) ;There are risks to fulfill obligations related to the debtor by Islamic Banking( Credit risk ) , there are a set of

1.0 INTRODUCTION Islamic banking is the banking system which runs in accordance with the Islamic laws and the Shariah board that guides the institutions. Apart from that, Islamic banking is an interest free banking, which there is no fixed rate of return. The Shariah board authorizes the production that whether these are Shariah compliant or not. Islamic banking is the banking that is guided by Islamic law (Shariah) principles and guided by Islamic economics. Islamic law forbids the usury, the collection

Abstract It is undeniable fact that Islamic banking system has been flourishing for last few decades and now has become the focus of global market forces. Pioneers of Islamic banking proclaim that foundational principles of Islamic banking is allied with Shari’ah guidance and their accounting practices, policies and financial reporting mechanism is based on Sharai’ah values. Consequently, Islamic institutions have the responsibility to follow Islamic rulings in all their practices. The core purpose

1.0 Overview 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

hobby based and prohibited in Islam. The most prominent kind of financing by every Islamic bank in Malaysia is Bai' Bithaman Ajil. Bai' Bithaman Ajil implies a "conceded installment deal". It is a method of Islamic financing utilized for property, vehicle, as well as financing of other

Comparison between Islamic Banking and Conventional Banking Introduction As far as commercial banking is referred, there are two main differences from the traditional approaches (conventional or Islamic), and these are very significant evolutions. One is that this method believes commercial banks as serving providers, rather of like “money lenders” (conventional) or “investing-collaborators” (Islamic). Interest-free banking is inferred as a sub-model; the conventional banking is considered as

Efficiency of Islamic Banks in Malaysia Mariani Abdul Majid* NOR GHANI MD. NOR** FATHIN FAIZAH SAID ABSTRACT IN RECENT YEARS, MALAYSIAN ISLAMIC BANKS HAVE TO OPERATE IN AN INCREASINGLY COMPETITIVE ENVIRONMENT. THIS TREND IS EXPECTED TO CONTINUE AS THE COMPETITION FROM CONVENTIONAL BANKS PICKS UP, PARTLY IN RESPONSE TO THE ASEAN FREE TRADE AGREEMENT (AFTA), BUT ALSO IN RESPONSE TO THE GENERAL GLOBALIZATION OF MARKETS. HOW ISLAMIC BANKS WILL BE AFFECTED BY THE INCREASED COMPETITIVE PRESSURES

The key differences between the Islamic Banking and the conventional banking are given below through the table. SL Indicators Islamic Banking process Conversional banking 01 Business skeleton Functions and governing modes are stood on Shariah and Islamic banks must make sure that all business actions are conforming to shariah necessities. Functions and Governing modes are stood on secular values; do not follow the religious guidelines or law. 02 Interest charging Financing is strictly abdicating

CHAPTER ONE GENERAL INTRODUCTION 1.1 BACKGROUND TO THE STUDY This study is undertaken to understand the concept and features of Islamic banking and conventional banking, the similarity and differences between the two systems and their economic implications. Generally, a financial institution or a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly or through capital markets is given the name of bank. its source of generating revenue and

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