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Islamic Banks

In: Business and Management

Submitted By binthaider
Words 355
Pages 2
Islamic banking and finance in the UAE problems and prospects Islamic banking means the system that is based on the principles of Islamic law ( also known Shariah) and guided by Islamic economics. Two basic principles behind Islamic banking are the sharing of profit and loss and significantly the prohibition of the collection and payment of interest.
Collecting interest is not permitted under Islamic law.
Problems:-
Most of the Islamic banks operate by-murabaha and by muazzal.
Bai –salam,istisna, hire purchase leasing mode of investment i.e., islamic banks always prefer to run on mark up / guaranteed profit basis having shariah coverage for this reason some times the conventional economists and general people failed to understand the real difference between isalmic banking and conventional banking .
( mudaraba) and ( musharaka) are two modes of investment are ideal.
But islamic banking are not going in this two modes the reasons for the above are as follows:- 1- There is systemic analysis and research and no real efforts to introduce above mentined two modes but the practitioners blame the following factors… - there is lack of committed enterpreneur. -there is lack of committed proffessional who can create new. – instruments - there is lack of committed sponser sho can pressurize the proffessional.
-there is shortage of skilled proffessionals.
2- the problem of forward contact booking of foreign currency
3-the regulatory environment.
4-absence of liquidity iustruments
5-need of professional bankers
6-use of advanced technology and media.
7-blending the approach of islamic scholars with the approach of the conventional bankers.

Prospects:-
1-In my understanding the prospect of islamic banking is very bright.
2-muslim people in UAE want islamic banking.
3-The islamic banking in UAE should be well managed and successful so that people have faith in this system.
4-established islamic banks in uae should co-operate by lending competent officials in setting up new islamic banks.
5-the problems specified before can be solved with more research and dedicated efforts.
5-i have no doubt in mind that isalmic banking will expand more and more in the entire uae and all over the world.

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