Islamic Banking

The events of recent years have demonstrated the resentment of the Muslim world against the Western powers. Such power is most evident in the financial arena, where Western banks and financial markets dominate in clear contrast to traditional Islamic beliefs. However, in the last 25 years, there has been development of a non-violent challenge to that power. The change has come from a group of Islamic financial institutions and subsidiaries of international banks that have expanded their operations. The Islamic holy book, the Koran puts a ban on charging Riba, a form of common interest in pre-Islamic Arab society. This mechanism doubles the rate if a debt is not paid when due and continues in each time interval. Many consider the riba as an extemporaneous, and many Muslims see the interest as something that goes against religion. This could regulate the operation of modern banking, but the Muslims want to save money, protect it from inflation and invest in order to obtain benefits, and also to see the expansion of their businesses, build new power plants investing more in new capital. These conflicting demands of religious beliefs and economic need have been the impetus for change and growth of Islamic banking. In 1973, seven Arab nations joined to form the Islamic Development Bank, which function as the World Bank, promoting economic development but within the parameters of Islam (the bank has now 55 members). Among other initiatives, Elli Elhadj, says it was first introduced in 1980, an instrument in accordance with Islam. Today there are 150 Islamic banks around the world. With growth, conventional international banks also have followed the trend by offering special products to investors and even private ATM or the possibility for Muslim clients know their money is being handled in a religiously pure. Today a Muslim can even easily be benefited by the availability of Credit cards Dubai. The Islamic finance industry has started to gain major momentum outside Islamic bank Dubai. As more financial institutions begin to introduce Sharia-compliant banking products and services, the growth of this market segment provides a new opportunity for Banks of Dubai to export their business outside of the region to serve the more than 1 billion Muslims living worldwide. There is now a Dow Jones Islamic Index, which includes companies that produce alcohol, snuff and other items prohibited by Islam. However, some obstacles prevail, and cultural differences of each country, between different Islamic banks and product offerings of these institutions. The market is segmented by the level of religious conservatism. Consequently, some groups have met to try to set standards. To some experts, the underdevelopment of the Muslim world in some areas has been the result of religious rules that limited the size of the organization, inheritance patterns preached and held some legal protection to corporations and individuals. In the process, the Muslim world lost valuable time while the industrial revolution was changing the western and developing new legal and religious systems, which drove economic growth. However, innovations that occur in Islamic finance could boost development in the Muslim world after the facilitation of internet banking, debit & credit cards in various banks of Dubai and all over the middle-east.

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