Islamic Banking and Finance Essay Example | Topics and Well Written Essays - 3000 words

Islamic Banking and Finance - Essay Example The essay "Islamic Banking and Finance" talks about the structure and concepts of Islamic banking and financial systems. The Islamic financial system guarantees that the formulation of capital would take place at a desirable rate and because it would be utilized efficiently there would be sustainable economic expansion along with everyone receiving equal advantages. It was about four decades back that Islamic banking and finance discipline came up. There was an awareness of the abstract expansions of Islamic banking back then during the late 1940s. By the next twenty years, they increased such that there was a model developed which the Middle Eastern nations adopted in order to meet the requirements of their kinds of banks. Several of such Islamic banks came up by the 1970s and they had a good enough reputation. By the beginning of the 1980s the Islamic banking industry was already emerging and at that time three Muslim nations (Iran, Pakistan, and Sudan) made a decision of transforming their system of economics and finance to Islamic. Following this, there was an establishment of individual Islamic windows and subsidiaries by the financial market players of the West. In the recent times, there are many people who have been thinking since the last few years that Islamic finance and the banking systems are similar to the conventional banking systems. In many cases, it has been said that the similarity is being generated so as to make the Islamic rules in the banking and the economics look much more diluted. As in many cases it has been found that the term Islamic banking or the Islamic finance has been one of the misleading terms when the many similarities between the Islamic and the conventional banking is taken into account. This paper shall thereby make an attempt to remove the misleading meanings that in many cases has been blurring the true image of the Islamic banking in the world. Islamic banking has many differences as compared to the conventional banking and here the differences shall be highlighted. An important role is being played by the Shariah advisers as these are the one who have the responsibility to take the responsibilities of all the laws and the rules being followed in the Islamic bankin