Awareness about Islamic finance in the UAE or Gulf from the perspective of an islamic bank...

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Awareness about Islamic finance in the UAE or Gulf from theperspective of an islamic bank and a conventional one, how do theydiffer from each other ?

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The discourses of Islamic and conventional finance differ according to the principles of Islamic finance there is no separation of the spiritual and the secular Islamic finance is explicitly concerned with spiritual values and social justice in contrast to conventional finance which is based on the maximization of individual utility welfare and choice as expressed for example in the shareholder value model Islamic and conventional banks respond differently to financial shocks The below inference analyses the performance of Islamic and conventional banking systems in the UAEGulf The study will comprise of two stages first a comparative analysis Secondly a cross sectional analysis between the Islamic banks and conventional banking sector that operated in the UAEGulf The discourse of Islamic banking involves a equity rather than debt b financing in strict relation to assets rather than leverage c transparency and information sharing between investor and the manager d diversification of risk by risk sharing In contrast the discourse of conventional finance failed as a result of a too much debt b overleveraging of assets and c excessive securitization and creation of new assets that were neither transparent nor understood This will alllow you to understand the two banking sectors in terms of capital adequacy profitability liquidity and leverage Islamic Financial System One of the key differences between conventional and Islamic banking is the ban on Riba usury riba is any returnadditionincrease for the userent of money Islamic financial institutions must trade in real assets or services There are several reasons for the prohibition of riba such as Unjust a contract based on interest involves injustice to one of the parties the lender or the borrower Penalizing someone for default is unjust a judge should decide the amount of any compensation for a default not the party to whom the debt is owed Quran 2279 clearly states that taking an amount in excess of the principal would be unjust And Implies Unlawful Appropriation of Other Peoples Property Interest on money is regarded as representing an unjustified creation of instantaneous property rights It is unjustified because interest is a property right claimed outside the legitimate framework of recognized property rights Some key features as Money verses real market Money creation in a system of debt See Answer

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