ISLAMIC BANKING OPPORTUNITIES AND CHALLENGES

Islamic Banking Opportunities and Challenges



Abstract

The reason of this study is to enquire the possibilities of development and development as well as the major trials to Islamic banking in the UK. The UK is the hub of Islamic banking and comprises significance in Islamic economic part due to its very fast growing Muslim population. Islamic banking is opposite some large trials in the UK because the economic scheme is more favourable to accepted banking. A qualitative study will convey out which engage nine in-depth meetings with three distinct assemblies of persons for example the Banking Authorities, the Customers of Islamic banking and non-Customers of Islamic banking. The meetings will groundwork on fundamentals of Islamic banking, rudimentary comprehending to Muslim community, data scheme and the development possibilities associated to goods and market development as well as adversities and trials in the way of Islamic banking in the UK. The keywords in this study are Islamic banking, Islamic investment, Muslim community, Muslim scholars, Islamic banking development in the UK and Islamic banking challenges.

Islamic Banking Opportunities and Challenges

Introduction

This section presents a short backdrop of Islamic banking in the World as well as in the UK about its scheme and practice. The Islamic economic regulation has long annals but Islamic banking and investment commerce came into reality with earnings and decrease distributing buying into by Egypt's Mit Ghamr Saving Banks in 1963. After authorized reality Islamic banking has developed in the locality of investment, banking, protection, mortgage, and assets administration enterprise with annual development rate of 10-15 %. But genuine development in Islamic banking is begun after 1970 with new buying into methods, schemes and merchandise development (Steward, 2008). Dubai Islamic Bank (DIB) is renowned as world first Islamic bank it was formed in 1975. Currently it has 48 parts which large services. DIB boasts higher comes back than accepted banking scheme as well they supply auto, dwelling and individual investment goods (Platt, 2008).

In some nations for example Pakistan, Iran and Sudan all banks are functioning as asserted by Islamic economic regulation but in some other nations for example Bangladesh, Egypt, Indonesia, Jordan and Malaysia Islamic banking services are supplied through accepted banking. There is large-scale action begun in the Western nations particularly United Kingdom, Australia and United State (Shanmugam, Perumal and Ridzwa, 2004). In the UK two major high road banks are supplying Islamic economic services on comparable cornerstone and Islamic Bank of Britain is completely as asserted by Sha'riah regulation (Karbhari, Naser, and Shahin, 2004).

Islamic banking is founded on Islamic Sha'riah Law which presents all answers of economic problems. According to Islamic regulation interest is completely prohibited in Islam because interest has allotment of awful sways on humanity for example their earning capability, buying power and boost scarcity, unequal circulation of riches and borrowing urgent position in an economy.

According to Usmani (2005) the major drawback in interest founded scheme is financier has no anxiety with cash when he presents an interest bearing lend to a ...