Researches in the Field of Islamic Finance
We live in a world where money holds a very important place in our lives. To generate enough money to suffice for the needs of the people is the general task of financial and banking sector of any country. Although different countries follow the conventional banking and financial sector i.e. profit taking, but this method is being started to be believed as huge risk now. Many times depressions like the ones of 1929 and 2007 have been triggered due to the bubble bursts of this transactionary system. In recent times a lot of research are being done on the Islamic way of banking and raising capital.
Basic Islamic Finance Rules and Traditions
Islam is a religion that guides its followers in every walk of life. Similarly there is guidance in the banking sector as well from the Holy Prophet P.B.U.H and his disciples. To start with, Islamic banking and finance is a mode of transactionary system that prohibits the payment of interest also called “Riba”; from one side to the other. Similarly, Islamic sharia also prohibits its followers to not indulge in investing into any forms of businesses that provide goods or services. These two principles or say objectives were one of the main foundations of western banking and financial system.
Clever Ideas for Islamic Finance Essay Writing
In Islamic way of raising capital, a great emphasis is laid on limited liability partnerships, exchange bills, promissory notes or bonds. In Islamic banking and finance, profit and loss is shared among parties rather than been taken from one party. In this way Islamic banking and finance helps keeping a check on the capital side and makes sure that the inflow of money trickles down to the very basic level i.e. poor part of the society. Mortgage is another method used in Islamic banking where bank serves as a third party between the buyer and seller. Thesis Writing Service points that the bank buys the items from the seller and pitches it at a slight high rate to the potential buyer. The buyer pays off the cost in installments and there are no penalties on the buyers for late payment. Penalties in Islamic banking are also considered to be a part of interest charged by banks.
Islamic banking is progressing by leaps and bounds now with research being done on it not only in Islamic countries but also in the West. The West sees Islamic banking and finance as a potential banking sector for the future and is trying to bring people to this newer concept.