The importance of banking is paramount in an economy. There is a clear distinction between conventional and Islamic banking. Conventional banks are charging interest through lending and accepting the deposit for interest. But interest (Riba) is strictly forbidden in Islam as evident in this verse “And because of their charging riba while they were prohibited from it.” (Quran, An-Nisaa 4:161). So Muslims established their own Riba free financial institutions separately to the conventional banking system. The growth of Islamic Financial Institutions became strong at the Conference of Foreign Ministers of Muslim countries to establish Islamic Development Bank in 1975 (Islamic Development Bank [IDB], 2017). The Islamic banks have gone through tremendous …show more content…
Modern banking reached Muslim countries at the end of 19th century and early 20th century, primarily through European trading companies which engaged in trade with Muslim merchants and their enterprises. They required banking facilities in Muslim countries to provide the medium for exchange (moneys) for trading transactions. Although Muslim traders avoided the use of “foreign banks” for religious and sometimes nationalistic reasons, the growth of trade did, in time, require them to maintain current accounts and use bank transfers systems. Borrowing and saving with a bank continued to be avoided in order that there was no dealing in interest. The issue of interest-free banking came to the attention of Muslim intellectuals in the 1940’s and 1950’s. By this time economic and financial influences had produced a number of local and national banks established along the lines of interest-based foreign banks. They had started to bring the banking system and its services to the local population. By this time Governments of Muslim countries, particularly those, which gained political independence, had of necessity to engage in international financial transactions using banking systems. The requirement for commercial banking was recognized. The challenge was to avoid the concept of interest within commercial banking. The route to this was the development of the concept of profit and loss sharing (Mudaraba), the key concept from which the structure of most Islamic Banking products and services are derived. The 1960’s and 1970’s provided the political background and platform by which to attract the attention of Muslim Governmental and National Financial Institutions. Through a number of high profile conferences, where the theory of Islamic Banking was brought to the practical application the Islamic
Men made it, but they can’t control it” (33). The bankers are trying to wipe the blood off of their own hands and shift the blame onto something else. However, that something else is a man made thing, and the statement is true on many levels. Humans did create the bank, much as humans created greed, and it seems as if there was never any control of either
During the Middle Ages, a banking system was created by the Islamic People. The banking system was developed to end the confusion between many currencies and to expand trade. Economy also relied on trade. The people of Arabia traded with far lands and in their capital city of Mecca. *With a united empire, Quarysh tribe, banking system, and trade, the Islamic people were innovative with relating themselves with the rest of the world.
The Islamic Empire was a significant and long-lasting civilization that had a wide-ranging impact on the world. Islam is a monotheistic religion founded by the prophet Muhammad in the Arabian city of Mecca in the early seventh century CE. The Islamic world's vast geography, which stretched from Spain to India, aided in the spread of Islam through trade networks, military conquests, and the migration of Muslim communities. The advancements in Islamic art during the Golden Age, as well as the Islamic Empire's influence on Umayyad Spain, demonstrate the Islamic Empire's enduring significance.
Banking is like any other business that takes the money of people and puts it to another use. Though this may be true, banks should not be doing it only to the poor but also to the rich.
Banking system is essential in our economics to maintain an effective circulation of money. The bank has functions for regulation of currency to aid strong economy. Distribution of the money is crucial to promote construction of the nation and prevention of bankruptcies. In our modern economic structure is supported and developed by the banking system. However, there was a period that the national bank was shut down by the government the consequence of the bank war.
There was a split in Islam because the Sunni and Shia believed differently on who Muhammad’s successor was. The Sunni believed that Muhammad’s successor was Abu Bakr, which is the father in law of Muhammad. But the Shia believed that Ali ibn Abi Talib was Muhammad’s successor, which was his soninlaw. This caused a debate between the Sunni and Shia and later on caused the split in Islam.
The stability of the society of the Middle East was affected by several aspects which made trade and commerce less viable, where Islam allowed much in the way of progress in the thirteenth and fourteenth
Banks make profit by the application of interest to the credit loaned, but where does all this money come from if all the money is being given out? Well, it is something you have probably heard of, and they are commonly referred to as bank accounts. A thousand Americans get together put all their money into a bank,
Furthermore, this period involved the implementation of new concepts in the areas of philosophy as well as finances and trade. These revolutionary concepts included the formation of banking institutions to provide financial security (Goldthwaite, The Economy 206), and to provide a means of currency exchange (Goldthwaite, Local Banking 6). The usage of banking during the Renaissance had significant benefits for the Italian city state of Florence and positively impacted Europe’s merchants, as well as northern Italy’s wealthy noble classes. In Florence, banks were able to favorably affect the city state as a whole.
This created many new possibilities, such as a check written in one part of the empire could be cashed in on the total opposite side or in a distant city. This spectacular achievement even contributed to the expansion of trade and marketing of goods throughout the empire and in foreign countries. Overall, this newly developed banking system had a major impact on life in the Muslim world because it was much less confusing and it was more convenient to cash in checks anywhere you were in the
Benefit of The Tabung Haji Islamic shariah law. Shariah prohibits acceptance of specific interest or fees for loans of money that is known as riba, or usury, whether the payment is fixed or floating. Investment in businesses that provide goods or services considered contrary to Islamic principles that is pork or alcohol is also haraam. Shariah Principle in Tabung Haji Investment Al-Masyarakah
Silverstein’s second chapter talks about the peoples and cultures who created and shaped Islamic history. (Page 49) --> The chapter divides the people who contributed to Islam into the Arabs, the Persians, and the Turks . (pages 49-50) At first, it was believed that since Islam began as a chosen-people religion and was first aimed exclusively at the Arabs, one had to an Arab to be a Muslim.
After reading Chapter 8, the passage titled "The Islamic Faith" intrigued me the most. This passage explains in depth the religion that the Islamic world believes. The Islamic faith follows the teachings of Muhammad, and a monotheistic faith. Muhammad preached the teachings of the undividable God to the people of the Islamic world, which convinced many of them to give up their previous beliefs and follow his teaching. This resulted in Muhammad gaining a large association of followers.
I would frame the banking as an industry that is built on trust. Trust that is reaffirmed by the governments, and regulators. Banks have an imperative role in our economic growth, and development. Correspondingly, without the bank industry, there is no industry to replace them as the conduit for social and economic policy. Equally important, there is no industry to replace them as the key performer in creating our economies multiplier effect.
In matters of confidentiality, Banking is risky due to the highly sensitive nature of information which is often exchanged, recorded and retained. The purpose of this article is to discuss the clash of confidentiality and disclosure in the banking sector across the globe. The Black’s Law Dictionary defines confidentiality as secrecy or the state of having the dissemination of certain information restricted. Breach of confidentiality, then, refers, to the violation of this trust that has been placed in another in a fiduciary relationship, in this case bank and their customers.