Islamic Banking Characteristics

Characteristics of Islamic banking: Islamic Banking has the following characteristics:

• In Islamic banking, bank implications with clients is a fair relationship between the supply or account container with an investors account manager that work together to be lively and the income on dreadful conditions evenly. So, it can keep away from the unfair relationship between the bank and the client or vice versa between customers and banks.

• The certainty of exclusion of exact measures by the Islamic Banking business which aims to generate creative economic activities (the prohibition wealth (natural resources) are restricted by a small society and non-fruitful, creating a fair economy.

• The transactions of Islamic banking is extra diverse

This undermines their function of financial inter mission between firms and household. It is amazing that we do not look at development towards Islamic economics standards through looking at the amount of fairness markets, number of self-employed professionals. They through looking are all avoiding interest directly. The path dependency is followed more carefully in product design for commercial possibility and for which enough covenants had been developed by ways of incident and legislation which make these structures highly usable in current times.

• Banking access is 11% in Pakistan, then, 89% of the inhabitants is already interest free by not being directly involved in interest based banking. If business possibility is a valid excuse when 89% of Pakistanis not use banking services in the first place, then, Islamic banking diffusion in future will become a problem against itself when there will be an intellectual term to alter the arrangement for Maqasid-e-Shariah compatibility.

• Banks hide behind the small number of rich depositors who in the first set are only placing funds with banks as a secure way to commons liquidity rather than as a way of investment. It is confirmed by the very low deposit tax in Pakistan which do not even makeup half of price rise rate in Pakistan during the last 10

While mutual bonds have very slight incursion and banking services are handled by only 11% of population. Most savers with plenty risk apatite seem to spend in derivative marketplace for honesty. Karachi Stock Exchange had provided return of 48% and 49% in 2012 and 2013 respectively. Hence, the less risk bad investors favor equity investments in liquid stocks for parking their extra money. Still, no Islamic bank is in micro economics in Pakistan and not yet in asset