ISLAMIC BANKING

Integrating Islamic Finance Concepts Into Modern Banking Systems

Abstract

This paper aims to clarify the chronological significance of Islamic finance that is experienced in the modern world of Islamic banking. It is a famous fact that the commercial practice of Islamic finance appeared as a new financial system different from interest-based conservative finance. Some of the bankers even called inquisitive banking based on holy belief. However, when examining the distinguishing feature of Islamic finance and evaluating the narration of the pre-modern Islamic world and Europe, it can also be observed that Islamic finance shares its characteristic with financial activities in the pre-modern era. Research, is therefore needed in order to identify the strengths and weaknesses of Islamic banks to meet the demand of Muslim depositors, investors and businesses according to the rules of Islamic Shari'a. It is also necessary to know the perceptions, expectations and attitudes of potential or existing clients to Islamic banks. Based on these motivations and initial facts, this paper examines the characteristic characteristic of Islamic finance by matching the designs of both financial products between Islamic and accepted finance. Subsequently, the paper reconsiders the chronicled know-how of financial activities in the pre-modern Islamic world and Europe, and clarifies the universal facet of Islamic finance in the context of financial idea with reassessing the proposition that accepted finance is taken to be the universal financial system. At the identical time, this paper furthermore examines the up to date novelties of Islamic finance because the emergence of Islamic investment opens a new sheet in the annals of both Islam and finance. This study focuses on the organisations of financial products that are taken up by Islamic banks, and concludes that the financial system in agreement with Islamic teachings tensions the significance of the powerful linkage between the financial instruments and the genuine assets By reconsidering the restrict of the living publications critically, it is clear that this paper desires to clarify the comprehensive characteristic of Islamic finance that has the commonality between partnership-based and debt-based instruments

Table of Content

ABSTRACTII

CHAPTER 1: INTRODUCTION1

Background1

Objective2

Hypothesis3

Research Questions3

Theoritical Framework3

Problem Statement6

CHAPTER 2: LITERATURE REVIEW8

Islamic Banking8

Islamic banking concepts and practices8

Islamic banking concepts and paradigm8

Musyarakah & Mudarabah9

Ijarah Financing10

PLS Theory11

PLS Paradigm13

Islamic And Conventional Banking14

Global Economic Crisis18

International Accounting19

Cultural Influence20

Accounting and Auditing Organization22

Commercial And Investment Banking25

Characteristics Of Islamic Banks29

Brand Management30

Summary32

CHAPTER 3: METHODOLOGY35

Research Design35

Data Collection Method38

Data Collection39

Sample39

Instruments39

Limitations40

Future Extensions40

CHAPTER 04: DATA ANALYSIS AND FINDINGS41

Analysis41

An overview of the characteristics of Islamic banks41

Banking regulation of Islamic banks43

Accounting treatments of investment accounts prior to self-regulation46

CHAPTER 05: CONCLUSION55

Conventional Financial System55

Service Quality55

Islamic Finance Concepts56

Financed Assets56

International Conventional Banks57

Aggregate Investment Portfolio58

Islamic Banking Scheme60

CHAPTER 06: RECOMMENDATIONS61

Brand Management61

Interest-Based Financial System61

Relational Or Process62

Recognition63

Customer Satisfaction63

REFERENCES64

APPENDICES68

Questionnaire68

CHAPTER 1: INTRODUCTION

Background

Islamic Banking & finance has been globally experiencing a renaissance over the last decade. It has received overwhelming response from across the globe as one discovers its ideological dimensions and practical richness and significance. Starting from the very basic of Islamic teaching & philosophy, Islamic Economics thoughts accept that every human being needs involvement in some kind of economic activity for survival and it is a legitimate ...