Islamic Banking and Crisis

By

ACKNOWLEDGEMENT

My thanks go out to all who have helped me complete this study and with whom this project may have not been possible. In particular, my gratitude goes out to friends, facilitator and family for extensive and helpful comments on early drafts. I am also deeply indebted to the authors who have shared my interest and preceded me. Their works provided me with a host of information to learn from and build upon, also served as examples to emulate.

DECLARATION

I, (Your name), would like to declare that all contents included in this thesis/dissertation stand for my individual work without any aid, & this thesis/dissertation has not been submitted for any examination at academic as well as professional level previously. It is also representing my very own views & not essentially which are associated with university.

Signature: _______________________________

Date: __________________________

ABSTRACT

The research aims to study the causes of financial crises, the concepts and elements of financial development and points of view and position of the Islamic banking system. The research reviewed a number of literatures coming to know that Islamic law or Sharia prohibits the payment and collection of interest, as it is intended that the money does not generate money. However, that does not mean that the Muslim community does not need financial instruments, as the Muslim community also needs to cover its financial needs, although this should look like and avoid paying interest charges. Investment in the private sector is to be met by interest-free financing. Second, the development of financial instruments on the basis of profit and loss sharing and the allocation of risks are to be made. The hope was that the crisis would be limited to the financial markets with few effects on the real economy and the rest of the world. The Islamic banking industry has developed to a considerable extent by the assumption of interest-free operations. However, there are several other things that are of the Islamic banking authorities considered that this system must be less risky in any way. Considering the research, it is safe to say that we fail to reject both the hypothesis (H0, H1)

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1- INTRODUCTION1

Islamic Law (Financial)2

Background3

Importance of Banking (African perspective)5

Recent Trends6

Islamic banking in the Gulf8

Spreading of Islamic Banking10

Stimulation of Financial growth12

Research Aim:12

Research Questions:12

Research Hypotheses:13

Objectives13

CHAPTER 2- LITERATURE REVIEW14

Islamic Financing14

Ethical Ideas of Islam16

Real estate crisis in reference to Islamic banking17

Banking system18

Reforms20

Reforms of conventional banking21

Banking origins23

Distinguishing features in line of conventional banking24

Reluctance of conventional banks25

Referring to gambling26

Mudaraba27

Islamic banking instruments28

The Islamic bank system29

Advance establishment of payments31

Technical efficiency of Islamic Banks32

Comparison with conventional banking34

Descriptive and deductive approach in the study of the Bank's operations35

Client base37

Customer Awareness38

Provisions of Islamic law40

Resilience of the Islamic banking system42

Barriers to Islamic banking43

Consumer preferences44

Characteristic of intermediaries45

CHAPTER 03- METHODOLOGY47

Evaluation of Islamic Banking as a tool48

The Research Philosophy49

Research Design50

Literature search50

Ethics in terms of research51

CHAPTER 4 - RESULTS52

Interest Payments in Islamic Banking52

Most efficient system as an alternative for conventional banking53

Prohibition of interest55

Intermediaries between the capital and debt markets55

CHAPTER 5- DISCUSSION57

Example of the Bangladesh economy57

In reference of Recent Trends58

Infant stage of Islamic banking60

Debt ...