Islamic banking is at a crossroads: it must now either integrate with the conventional financial infrastructure or relegate itself to the sidelines of world banking. Despite recent growth among Islamic financial institutions, pessimism remains regarding whether Islamic banks can compete with conventional banks. One obstacle that Islamic banks must continually overcome is the restrictions that Islamic law imposes on the types of products that can be provided.
Among the institutions cited by Asiamoney as the best commercial banks in Asia is Pakistan's Faysal Bank Limited. Faysal Bank increased its lending by a large margin in the last year. It is a firm with the backing of a powerful Middle Eastern group. The low 39% cost-to-income ratio of Faysal Bank gives this institution an edge over others.
No single development model will work for all less developed countries, because of their diversity. This recognition of each country's unique situation has, remarkably, only recently been established. The thinking that there was only one path of development resulted in the Westernization and the quick industrialization projects undertaken in less developed countries. These projects led to a disruption of the lifestyles of native peoples. It may be said , however, that development strategies for the
Because the weekend in the West begins on Saturday and the Islamic world takes Friday off, opportunities for interaction with Western firms are fewer than they might otherwise be without such a difference. Pakistani businessmen have consistently been calling for a change in the structure of the working week so as to take Sunday off and work on Friday.
The duty of the auditor varies in accordance with the particular economic, political, and social system in which he is working. The author discusses the nature of Islamic banks and investment companies, and then defines the role of the auditor for such financial institutions. As a representative of the shareholders, he works for the shareholders, is responsible for supervising and reporting upon the activities of the economic unit, and is accountable to the shareholders, who are represented by the general assembly.
On March 4, 1993, three conventional banks in Malaysia were allowed to open interest-free (Islamic) banking counters in addition to their other practices. Since the 1980's , there have been institutions that offer non-interest services. At this point, however, the Islamic institutions' place in the market is quite small. Since Muslims consider interest to be wrong, the demand for non-interest services can rise. The non-participation in the banking system by certain Muslims can hurt the development strategy of the country. An integrated Islamic system needs to be set up.
The author is interested in the examining the essence of the practice of Riba in its two main categories of
The Institute of Islamic Banking and Insurance was founded in September of 1993. The organization is a non-profit establishment located in London. The goals of the institute are to: 1. Promote Islamic banking by means of conferences, lectures, and similar methods; 2. Educate potential Islamic bankers and insurance professionals; 3. Aid and offer advice on Islamic banking and insurance; 4. Develop Islamic finance tools; and 5. Undertake research on topics relevant to Islamic banking and insurance.
Loan capital interest, argues the author, is exploitative and a method of bondage. The underprivileged of a society and the less developed nations of the world suffer and are kept in debt by the institution of interest. The perpetual debt is terribly onerous and draining. Within an economy, the amount of investment undergone is related inversely to the rate of interest--interest rates go down, investments rise. Through increased investment, jobs are created. The same may be extended to a global model--if, internationally, interest rates can be reduced, more of the human race can work.