ISLAMIC BANKING & ITS APPLICATIONS IN AUSTRALIA

Islamic Banking and Its Application in Australia

Islamic banking and its application in Australia

Introduction

For millions of Muslims, banks are organisations to be avoided. Islam is a belief which holds Believers from the teller's window. Their Islamic convictions avert them from dealings that engage usury or concern (Reba). Yet Muslims require banking services as much as any individual and for numerous purposes: to investment new enterprise projects, to purchase a dwelling, to purchase a vehicle, to help capital buying into, to attempt dealing undertakings, and to offer a protected location for savings. For Muslims are not averse to legitimate earnings as Islam boosts persons to use cash in Islamic ally legitimate projects, not just to hold their capital idle.

However, in this very fast going world, more than 1400 years after the Prophet (s.a.w.), can Muslims find room for the values of their religion? The response arrives with the detail that an international mesh of Islamic banks, buying into dwellings and other economic organisations has begun to take form founded on the values of Islamic investment prepared down in the Qur'an and the Prophet's customs 14 centuries ago. Islamic banking, founded on the Qur'anic prohibition of ascribing concern, has shifted from a theoretical notion to adopt more than 100 banks functioning in 40 nations with multi-billion dollar down payments world-wide. Islamic banking is broadly considered as the fastest increasing part in the Middle Eastern economic services market. Exploding up on the economic view scarcely 30 years before, an approximated $US 70 billion worth of capital are now organised as asserted by Shari'ah. Deposit assets held by Islamic banks were roughly $US5 billion in 1985 but increased over $60 billion in 1994.

The best renowned characteristic of Islamic banking is the prohibition on interest. The Qur'an forbids the ascribing of Riba on cash lent. It is significant to realise certain values of Islam that underpin Islamic finance. The Shari'ah comprises of the Qur'anic instructions as prepared down in the Holy Qur'an and the phrases and exploits of the Prophet Muhammad (s.a.w.). The Shari'ah disallows Riba and there is now a general agreement amidst Muslim economists that Riba is not constrained to usury but embraces concern as well. The Qur'an is clear about the prohibition of Riba, which is occasionally characterised as unwarranted interest. "O You who believe! Fear Allah and stop that continues of your demand for usury, if you are really believers." Muslim scholars have acknowledged the phrase Riba to signify any repaired or assured concern fee on money improvement or on deposits. Several Qur'anic routes expressly admonish the trustworthy to shun interest.

 

Discussion

The directions considering Islamic investment are rather straightforward and can be summed up as follows:

a) Any fixed fee over and overhead the genuine allowance of primary is prohibited.

Islam permits only one kind of lends and that is qard-el-hassan (literally good loan) whereby the lender does not ascribe any concern or added allowance over the cash lent. Traditional Muslim jurists have construed this standard so firmly that, as ...