Business organization contracts often spur conflicts due to information asymmetry. Islamic business ethics can combat this problem. If an Islamic firm implements business contracts as designed and approved by the Shari`a, then principal-agent problems can be minimized.
With the right business model, LARIBA mortgage financing can be a viable option in the United States. It can only be successful if marketed at the local grassroots level to the estimated initial market of 7,500 households requiring about US$200 million of financing. Modeled as an alternative to traditional mortgages, LARIBA is a halal paradigm consisting of two parts.
Islamic banks can provide efficient banking services to customers in the U.S. if they are supported with appropriate banking laws and regulations.
Due to factors such as chancing client needs, new technologies, and regulatory reforms, the banking industry is changing rapidly. Regulatory reforms in financial modernization have triggered new industry dynamics, changing the environment yet again. The 1993 repeal of the Glass-Steagall act has been harmful to the Islamic banking industry. Larger, conventional banks are now offering products that compete more directly with Islamic banking products. Banking institutions deserve to have the flexibility to conduct any genuine financial activity in any genuine way.
Interest rates have long been recognized, by classical neo-classical, and contemporary economists, as one of the factors that determine the level of savings in an economy. Although there are exceptions, it is a generally accepted that interest rate has a positive relationship with savings. Presumably, customers are guided by the profit maximization theory. Since there is no pre-determined rate of return involved in the Islamic banking system, it is unclear whether Islamic bank customers are subjected to the normal conventional theory of economic behavior.
Islami Bank Bangladesh Limited (IBBL) is an Interest-Free Financial Institution in Bangladesh. A case study of its operations demonstrates how Islamic banking differs from the traditional banking system. The Islamic banking system has a unique set of financial tools and techniques. The presence of an Islamic bank can diversify a financial market.
One of the major hurdles in eliminating riba from the economy is the division in the
The ultimate aim of any successful monetary policy is to achieve economic growth, reduce inflation, and lower unemployment. Under an Islamic monetary system, such targets can only be achieved through monetary instruments consistent with Islamic teachings. It is important to determine the demand for Islamic monetary instruments in dual banking systems. How valid and effective are Islamic monetary instruments in such a system?
The state collection of zaka would help improve the quality of society. The collection of zaka would be more beneficial than the percent of income taxes currently allocated to charitable organizations by the U.S. government. Data from 1990 shows means-tested payments are approximately 2.5% of the U.S. national income. The potential of zaka is not limited, as some critics have claimed in the past.