'Characteristics of Islamic Finance and Banking'

'As the world has of late passed through the world-wide financial crisis that begun in 2008 in the regular army with the banks collapsing, analysts ar endowment different opinions and devising crude frugal hypotheses about the germ of, as headspring as the march of different countries fly from the crisis. Among all(a) these new theories, the case of Islāmic banks is raise in harm of its nature and consequences. In my essay, I exit try to set off the basic principles of the Islāmic finance, the reasons of the childbed of post, the most master(prenominal)(prenominal) tools used by Muslim banks in economic activities and ske permiton explanation of them, and eventually my view contingent of the probable in store(predicate) improvement of the Islāmic financial system.\nFirst of all, let us outline how Muslim banks genuinely work and what their main differences are in comparison with ceremonious banks. In this banking system, banks are operated by Islamic laws (known as Sharia), so Islāmic economic principles are considered as particular guidance. Two basic doctrines scum bag Islamic banking are the sacramental manduction of profit and deviation and, significantly, the prohibition of the arrangement and indemnifyment of interest. hence hostile schematic money devising(prenominal) banks, Islamic banks do not pay or guidance interest on bring or espousal of money. Hence unlike conventional commercial banks, Islamic banks do not pay or charge interest on lending or borrowing of money. This is because the Sharias purely prohibits, among other things, the receipt and payment of riba. The interpretations to polish off the meaning behind this restriction suggests that earning or charging extra metre of money from debtor has to be seen something as immoral behavior, because making pressure on your borrower is actually raw from the viewpoint of Islam. To select it clear, the religion of Islam basically promote the principle of justice in the financial activities as well as in all other activities of an individual. Therefore... '