Islamic Shari'a Concepts governing Islamic Banking finance
نویسنده
چکیده
Introduction It is submitted that accepting Islamic Banking within the western regulatory framework has encountered many impediments. A conventional bank is an institution that holds a banking license issued by banks' regulatory authorities which authorizes the chartered institution to conduct fundamental banking services such as receiving deposits, making loans, providing and saving account services. The conventional bank pledges a predetermined return on deposits; however, in the Islamic banking system depositors receive a portion of the bank's deposits as opposed to interest.1 In respect of conventional banking, central banks, control interest rates and money supply and act as lender of last resort. Investments and saving accounts in Islamic banks do not match with the legal definition of deposits in conventional banking terminology. This is the main reason why Islamic retail banking is not entertained in countries such as the U.K and the U.S.A. Islamic banking finance is controlled by specific mandates such impermissibility of rate of interest payment. Depositors of investment accounts whether such accounts are restricted or unrestricted must share in the losses arising out of the transactions in which the deposited amounts are used. On the other hand, they are entitled to reap their share of the profits obtained.
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