Islamic Finance Essay Example | Topics and Well Written Essays - 2250 words

Islamic Finance - Essay ExampleThe paper tells that despite the upheavals and mayhem that exists mingled with the Islamic land and the united Kingdom, as peculiar as it may seem, it is wise to say that Islamic riming and finance has found its way in the United Kingdom. Islamic finance is the basis of Islamic banking system. Laying its foundation on the rules and principles of Sharia, commonly known as the Islamic law, this offers Islamic finance its very alone(p) and competent features. As much as Islamic Banking has its challenge and opportunity, many western bankers have sort to involve themselves in this growing pedigree. Their guiding principles and rules assert that Allah owns everything in this world and that man has only been rendered permission to use it. In the United Kingdom, capital of the United Kingdom has emerged itself to be the core ad centre of Islamic banking. In the United Kingdom, a decennium ago, the business was perceived to be in its infancy this being t he reason as to why its extent is limited. A decade later, Islamic banking and finance has prevailed in the United Kingdom due to its unique characteristics. One of the most distinct characteristics that have made Islamic banking and finance business to grow is the fact that Islamic banking does not offer interests, which is commonly referred to as riba in the Islamic world. The reward for money deposited as perceived is done by not charging or paying interest. As a way of curbing the loss and cyberspaces occurred, Islamic banking use the technique of sharing both the profit and loss occurred. This is commonly known as mudarabhah, which in lay mans term means profit sharing. In cases that involve mortgage buying, the bank itself buys the mortgage from the seller then giving it to the buyer making profits thus allowing the buyer to pay the money in installments. The mortgage is registered under the buyers hear from the start to avoid any suspicions. This kind of arrangement is know n as Murabah. The entrepreneur feature of the Islamic banking and finance is another characteristic that has made this geek of banking to stand out. Putting its focus not only on financial expansion but on also physical expansion of economic go and production, this has made many western bankers to use the Islamic banking and finance services. Trade financing and equity financing have led the way for the Islamic banks. No wonder the growing trend of people enjoying their banking services. The United Kingdom being one of the worlds most sophisticated and complicated banking and financial systems, this has helped the Islamic banking and finance to prevail. The chief(prenominal) reason as to why Islamic banking and finance has prevailed more in London than in any other cities of the world is due to the fact that London is much closer to Middle East than any other cities. In fact, London is estimated to have hosted the worlds largest Islams in all the cities of the world (Anwar, 1995) . In the center of London, the Arab community is ranked among the most affluent Arabs in the world. To add on to that, Arabs restaurants and hotels exists in London center to cater for the Arabs that visit the metropolis every now and then. There has been an increasing number of doctors, engineers, and students in the United Kingdom. London emerges to be the leading market in the world for foreign up-to-dateness exchange, dollar being the popular currency trade. In the recent years, the retail level banking in the United Kingdom has gone down. This is due to the introduction of the Banking form of 1987, which allowed external banking to exist. The big four banking players dominance namely Barclays, Lloyd, NatWest and the Midland bank, the latter being the only one that has managed to secure its market share. Evolving from a small quoin bank in the Middle East in the last four decades, Islamic Banking and finance have grown in to a dynamic, profitable, and resilient adversary to all major banks in the United Kingdom. By the end of 2008, Islamic banks are estimated to be over $850 billion and