Islamic Finance Essay Example | Topics and Well Written Essays - 2250 words

Muslim Finance - Es articulate ExampleThe paper tells that despite the upheavals and havoc that exists between the Muslim world and the coupled Kingdom, as peculiar as it may seem, it is wise to say that Muslim banking and pay has found its way in the unite Kingdom. Islamic pay is the basis of Islamic banking system. Laying its foundation on the rules and principles of Sharia, comm just now known as the Islamic law, this offers Islamic finance its rattling unique and competent rollicks. As much as Islamic Banking has its ch eachenge and opportunity, many western bankers flummox sort to involve themselves in this growing business. Their guiding principles and rules state that Allah owns everything in this world and that man has only been rendered permission to use it. In the United Kingdom, London has emerged itself to be the core ad centre of Islamic banking. In the United Kingdom, a decade ago, the business was perceived to be in its infancy this organism the reason as to why its extent is limited. A decade later, Islamic banking and finance has prevailed in the United Kingdom due to its unique characteristics. One of the most distinct characteristics that have made Islamic banking and finance business to grow is the fact that Islamic banking does non offer interests, which is commonly referred to as riba in the Islamic world. The reward for money deposited as perceived is done by not charging or paying interest. As a way of curbing the loss and profits occurred, Islamic banking use the technique of sharing twain the profit and loss occurred. This is commonly known as mudarabhah, which in lay mans term means profit sharing. In cases that involve mortgage buying, the bank itself buys the mortgage from the seller then heavy(p) it to the buyer making profits thus allowing the buyer to pay the money in installments. The mortgage is registered chthonic the buyers name from the start to avoid any suspicions. This kind of arrangement is known as Murabah. The entrepreneur feature of the Islamic banking and finance is another characteristic that has made this type of banking to stand out. Putting its focus not only on financial expansion but on also physical expansion of frugal services and production, this has made many western bankers to use the Islamic banking and finance services. Trade financing and impartiality financing have led the way for the Islamic banks. No wonder the growing trend of race enjoying their banking services. The United Kingdom being one of the worlds most sophisticated and complicated banking and financial systems, this has helped the Islamic banking and finance to prevail. The main reason as to why Islamic banking and finance has prevailed more in London than in any other cities of the world is due to the fact that London is much closer to Middle eastmost than any other cities. In fact, London is estimated to have hosted the worlds largest Islams in all the cities of the world (Anwar, 1995). In the cente r of London, the Arab community is ranked among the most affluent Arabs in the world. To add on to that, Arabs restaurants and hotels exists in London center to cater for the Arabs that visit the city every now and then. There has been an increase number of doctors, engineers, and students in the United Kingdom. London emerges to be the leading market in the world for foreign currency exchange, dollar being the popular currency trade. In the recent years, the retail level banking in the United Kingdom has gone down. This is due to the introduction of the Banking Act of 1987, which allowed external banking to exist. The big four banking players handedness namely Barclays, Lloyd, NatWest and the Midland bank, the latter being the only one that has managed to secure its market share. Evolving from a refined niche bank in the Middle East in the last four decades, Islamic Banking and finance have grown in to a dynamic, profitable, and resilient competitor to all major banks in the Uni ted Kingdom. By the end of 2008, Islamic banks are estimated to be over $850 billion and